<PAGE>
As filed with the Securities and Exchange Commission on December 23, 1996
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
RHONE-POULENC RORER INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1699163
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
500 Arcola Road
Collegeville, PA 19426-0107
(Address of principal executive offices) (Zip Code)
RHONE-POULENC RORER
EMPLOYEE SAVINGS PLAN
(formerly known as Rorer Group Employee Savings Plus Plan)
(Full title of the plan)
RICHARD T. COLLIER, ESQ.
Rhone-Poulenc Rorer Inc.
500 Arcola Road
Collegeville, PA 19426-0107
(Name and address of agent for service)
(610) 454-8000
(Telephone number, including area code, of agent for service)
-----------------------
Copy of all communications to:
JAMES W. JENNINGS, ESQ.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
(215) 963-5726
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price aggregate registration fee
per share (1) offering price (1)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 450,000 $74.813 $33,665,625 $10,202
without par value
- --------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated pursuant to paragraphs (c) and (h) of Rule 457 solely for the
purpose of calculating the registration fee, based upon the average of the
high and low sales prices of shares of Common Stock on December 18, 1996,
as reported on the New York Stock Exchange.
(2) Pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the Rhone-Poulenc Rorer Employee Savings
Plan.
<PAGE>
This Registration Statement on Form S-8 (the "Registration
Statement") filed by Rhone-Poulenc Rorer Inc. (the "Registrant") relates to
450,000 shares (the "Shares") of the Company's Common Stock, without par
value (the "Common Stock"), and an indeterminate number of interests
issuable pursuant to the Rhone-Poulenc Rorer Employee Savings Plan (the
"Plan"). The Plan was formerly known as the "Rorer Group Employee Savings
Plus Plan." This Registration Statement shall act as a post-effective
amendment to Registration Statement on Form S-8, Registration No. 33-17269,
filed with the Securities and Exchange Commission (the "Commission") on
September 16, 1987.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents, as filed by the Registrant with the
Commission, are incorporated by reference in this Registration Statement:
(a) Annual Report on Form 10-K, filed with the Commission
on March 18, 1996 for the fiscal year ended December 31, 1995;
(b) Quarterly Report on Form 10-Q filed with the
Commission on May 10, 1996 for the quarter ended March 31, 1996;
(c) Quarterly Report on Form 10-Q filed on August 13, 1996
for the quarter ended June 30, 1996;
(d) Quarterly Report on Form 10-Q filed on November 6,
1996 for the quarter ended September 30, 1996;
(e) Proxy Statement for the Annual Meeting of
Stockholders held on May 3, 1996; and
(f) The descriptions of the Common Stock of the
Registrant set forth in the Registrant's Registration Statements pursuant
to Section 12 of the Exchange Act, and any amendment or report filed for
the purpose of updating such description.
In addition, the Report on Form 11-K for the period ended
December 31, 1995 with respect to the Plan, filed with the Commission on
June 26, 1996, is incorporated by reference in this Registration Statement.
All reports and other documents filed by the Registrant and the
Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, after the date of this registration statement and
prior to the filing of a post-effective amendment that indicates that all
securities offered hereby have been sold or that deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference
herein and to be part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes hereof to
the extent that a statement contained herein (or in any other subsequently
filed document that is also incorporated by reference herein) modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part hereof.
Item 4. Description of Securities.
-------------------------
Not applicable.
1
<PAGE>
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
The consolidated financial statements of the Registrant and its
subsidiaries included in the Registrant's Report on Form 10-K for the
fiscal year ending December 31, 1995 and incorporated by reference in this
registration statement have been audited by Coopers & Lybrand LLP,
independent accountants, as set forth in their report contained therein.
Such financial statements are, and audited annual financial statements to
be included in subsequently filed documents will be, incorporated herein in
reliance upon the reports of Coopers & Lybrand LLP pertaining to such
financial statements (to the extent covered by consents filed with the
Securities and Exchange Commission) given upon the authority of such firm
as experts in accounting and auditing.
The financial statements incorporated in this Registration
Statement by reference to the Report of the Savings Plan on Form 11-K for
the period ended December 31, 1995, have been audited by Coopers & Lybrand
LLP, independent accountants, as set forth in their report contained
therein. Such financial statements are, and audited annual financial
statements to be included in subsequently filed documents will be,
incorporated herein in reliance upon the reports of Coopers & Lybrand LLP
pertaining to such financial statements (to the extent covered by consents
filed with the Securities and Exchange Commission) given upon the authority
of such firm as experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Section 1741 of the Pennsylvania Business Corporation Law (the
"PBCL") provides the Company the power to indemnify any officer or director
acting in his or her capacity as a representative of the Company who was or
is a party or is threatened to be made a party to any action or proceeding
against expenses, judgments, penalties, fines and amounts paid in
settlement in connection with such action or proceeding whether the action
was instituted by a third party or arose by or in the right of the Company.
Generally, the only limitation on the ability of the Company to indemnify
its officers and directors is if the act violates a criminal statute or if
the act or failure to act is finally determined by a court to have
constituted willful misconduct or recklessness.
The Bylaws of the Registrant provide that the Registrant shall
indemnify any and all directors and officers of the Registrant and any
other person designated as an "indemnified representative" by the board of
directors of the Registrant (which may, but need not, include any person
serving at the request of the Registrant, as a director, officer, fiduciary
or trustee of another corporation, partnership, joint venture, trust,
employee benefit plan or other entity or enterprise) (each, an "indemnified
representative") against any liability incurred in connection with any
threatened, pending or completed action, suit, appeal or other proceeding
of any nature, whether civil, criminal, administrative or investigative,
whether formal or informal, and whether brought by or in the right of the
Registrant, a class of its security holders or otherwise (each, a
"Proceeding") in which the indemnified representative may be involved as a
party or otherwise, by reason of the fact that such person is or was
serving in an indemnified capacity, including without limitation
liabilities resulting from any actual or alleged breach or neglect of duty,
error, misstatement or misleading statement, negligence, gross negligence
or act giving rise to strict or products liability, except where such
indemnification is expressly prohibited by applicable law or where conduct
of the indemnified representative has been determined (as provided in the
Bylaws) to constitute willful misconduct or recklessness or unlawful self-
dealing, sufficient in the circumstances to bar indemnification against
liabilities arising from the conduct. If an indemnified representative is
entitled to indemnification in respect of a portion, but not all, of any
liabilities to which such person may be subject, the Registrant shall
indemnify such indemnified representative to the maximum extent for such
portion of the liabilities. The termination of a Proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendre or its
equivalent shall not, of itself, create a presumption that the indemnified
representative is not entitled to indemnification. The Bylaws provide
for the advancement of expenses to an indemnified party upon receipt of
an undertaking by the party to repay those amounts if it is finally
determined that the indemnified party is not entitled to indemnification.
An indemnified representative shall be deemed to have discharged
such person's duty to the Registrant if he or she has relied in good faith
on information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or presented by
any of the following:
2
<PAGE>
(1) one or more officers or employees of the Registrant
whom the indemnified representative reasonably believes to be reliable
and competent with respect to the matter presented;
(2) legal counsel, public accountants or other persons as
to matters that the indemnified representative reasonably believes are
within the person's professional or expert competence; or
(3) a committee of the board of directors on which he or
she does not serve as to matters within its area of designated authority,
which committee he or she reasonably believes to merit confidence.
The Bylaws authorize the Company to take steps to ensure that all
persons entitled to indemnification are properly indemnified, including, if
the board of directors so determines, purchasing and maintaining insurance.
The Company currently maintains directors and officers insurance.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
--------
The exhibits filed as part of this Registration Statement are as
follows:
Exhibit
Number Exhibit
------ -------
5.1 Opinion re legality (Common Stock of Registrant) (1)
5.2 Internal Revenue Service Determination Letter dated May
26, 1995.
23.1 Consent of Coopers & Lybrand LLP
23.2 Consent of Richard T. Collier, Senior Vice President and
General Counsel of the Registrant (included in Exhibit 5)
24 Power of Attorney
99 Rhone-Poulenc Rorer Employee Savings Plan
3
<PAGE>
Item 9. Undertakings.
------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in
the registration statement;
Provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii) of
-------- -------
this section do not apply if the information required to be included in a
post-effective amendment by those subparagraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered that remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
4
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities
--------------
Act of 1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in Collegeville, Pennsylvania,
on the 20th day of December, 1996.
RHONE-POULENC RORER INC.
By: /s/ Michel de Rosen
---------------------------------------
MICHEL DE ROSEN
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Jean-Marc Bruel* Director December 20, 1996
- --------------------------------
Jean-Marc Bruel
/s/ Robert E. Cawthorn* Director December 20, 1996
- --------------------------------
Robert E. Cawthorn
/s/ Michel de Rosen Chairman and Chief Executive Officer December 20, 1996
- -------------------------------- Director
Michel de Rosen
- -------------------------------- Director
Charles-Henri Filippi
/s/ Dale F. Frey* Director December 20, 1996
- --------------------------------
Dale F. Frey
/s/ Claude Helene* Director December 20, 1996
- --------------------------------
Claude Helene
Director December 20, 1996
- --------------------------------
Michael H. Jordan
/s/ Manfred E. Karobath, M.D.* Director December 20, 1996
- --------------------------------
Manfred E. Karobath, M.D.
/s/ Igor Landau* Director December 20, 1996
- --------------------------------
Igor Landau
/s/ Patrick Langlois Executive Vice President and December 20, 1996
- -------------------------------- Chief Financial Officer
Patrick Langlois
/s/ Philippe Maitre Vice President and Controller December 20, 1996
- -------------------------------- (Principal Accounting Officer)
Philippe Maitre
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Peter J. Neff*
- -------------------------------- Director December 20, 1996
Peter J. Neff
/s/ James S. Riepe* Director December 20, 1996
- --------------------------------
James S. Riepe
- -------------------------------- Director
Jean-Pierre Tirouflet
</TABLE>
* By: /s/ Richard T. Collier
--------------------------------
RICHARD T. COLLIER
Senior Vice President and
General Counsel
(Attorney-in-fact)
The Plan. Pursuant to the requirements of the Securities Act of 1933,
--------
of the Plan has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Collegeville,
Pennsylvania on December 20, 1996.
RHONE-POULENC RORER
EMPLOYEE SAVINGS PLAN
By: /s/ David A. Brandies
--------------------------------------------
Name: David A. Brandies
Title: Vice President, Employee Benefits
6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
------ ------- ----
<S> <C> <C>
5.1 Opinion re legality (Common Stock of Registrant)
5.2 Internal Revenue Service Determination Letter dated May 26,
1995.
23.1 Consent of Coopers & Lybrand LLP
23.2 Consent of Richard T. Collier, Senior Vice President and General
Counsel of the Registrant (included in Exhibit 5.1)
24 Power of Attorney
99 Rhone-Poulenc Rorer Employee Savings Plan
</TABLE>
7
<PAGE>
Exhibit 5.1
-----------
December 23, 1996
Rhone-Poulenc Rorer Inc.
500 Arcola Road
Collegeville, PA 19426-0107
Ladies/Gentlemen:
Rhone-Poulenc Rorer Inc. (the "Company") has requested my
opinion, as General Counsel of the Company, in connection with the
Registration Statement on Form S-8 to be filed by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended and the rules and regulations promulgated thereunder, (the "Act"),
with respect to, among other things, 450,000 shares of the Company's Common
Stock, without par value (the "Shares"), which are issuable pursuant to the
Rhone-Poulenc Rorer Employee Savings Plan (the "Plan").
I or attorneys under my supervision have examined such records
and have made such examination of law as I deem appropriate in connection
with rendering such opinion. I have also assumed that the registration
provisions of the Act and of such securities or "Blue Sky" laws as may be
applicable shall have been complied with. Based thereon, it is my opinion
that, as to Shares that are original issuance shares issued to eligible
participants in the Plan, when issued and delivered in accordance with the
provisions of the Plan, the shares will be legally issued, fully paid and
non-assessable.
I hereby consent to the filing of this opinion as an Exhibit to
the Registration Statement. In giving this consent I do not admit that I
am in the category of persons whose consent is required under Section 7 for
the Securities Act of 1933 or the rules and regulations for the Securities
and Exchange Commission thereunder.
/s/ Richard T. Collier
----------------------------------
Richard T. Collier
Senior Vice President and
General Counsel
<PAGE>
Exhibit 5.2
-----------
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE MD 21201-0000
Employer Identification Number: 23-1699163
Date: May 26, 1995 File Folder Number: 521015640
Person to Contact: Larry Winder
RHONE-POULENC RORER INC Contact Telephone Number: (215) 597-8951
C/O PHILIP Y LIN ESQUIRE Plan Name: RHONE-POULENC RORER
MORGAN LEWIS & BOCKIUS EMPLOYEE SAVINGS PLAN
2000 ONE LOGAN SQUARE Plan Number: 005
PHILADELPHIA, PA 19103
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your
permanent records.
Continued qualification of the plan under its present form will depend
on its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation
periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the
qualified status of your employee retirement plan, and provides information
on the reporting requirements for your plan. It also describes some events
that automatically nullify it. It is very important that you read the
publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. it is not a determination regarding the effect of other
federal or local statutes.
This determination letter is applicable for the amendment(s) adopted
on November 15, 1994.
This plan has been mandatorily desegregated, permissively aggregated,
or restructured to satisfy the nondiscrimination requirements.
This letter is issued under Rev. Proc. 93-39 and considers the
amendments required by the Tax Reform Act of 1986 except as otherwise
specified in this letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's
coverage group consists of those employees treated as currently benefiting
for purposes of demonstrating that the plan satisfies the minimum coverage
requirements of section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
<PAGE>
We have sent a copy of this letter to your representative as indicated
in the power of attorney.
If you have questions concerning this matter, please contact the
person whose name and telephone number are shown above.
Sincerely yours,
/s/ Paul M. Harrington
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
<PAGE>
Exhibit 23.1
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
of Rhone-Poulenc Rorer, Inc. (the Company) on Form S-8 of our report dated
January 26, 1996 on our audits of the consolidated financial statements of
Rhone-Poulenc Rorer, Inc. as of December 31, 1995 and 1994 and for the
years ended December 31, 1995, 1994, and 1993, which report is included in
and incorporated by reference in the Company's Annual Report on Form 10-K
for the year ended December 31, 1995. We also consent to the incorporation
by reference in this Registration Statement of the Company on Form S-8 of
our reoprt dated May 29, 1996 on our audits of the financial statements of
Rhone-Poulenc Rorer Employee Savings Plan as of December 31, 1995 and 1994
and for each of the two years in the period ended December 31, 1995, which
report is included in the Company's Annual Report on Form 11-K. We consent
to the references to our firm under the caption "Experts".
COOPERS & LYBRAND LLP
/s/ Coopers & Lybrand LLP
Philadelphia, Pennsylvania
December 23, 1996
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, does hereby
nominate, constitute and appoint Richard B. Young, Richard T. Collier and
Patrick Langlois, or any of them, as his agent and attorney-in-fact, in his
name to execute on behalf of the undersigned one or more Registration
Statements on Form S-8 to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, in connection with
the registration under said Act of shares of Common Stock of Rhone-Poulenc
Rorer Inc. (the "Company"), the authority herein given to include execution
of amendments to any part of such Registration Statement and generally to
do and perform all things necessary to be done in the premises as fully and
effectively in all respects as the undersigned could do if personally
present.
IN WITNESS WHEREOF, this power of attorney has been executed in
counterparts by individuals listed below as of the 30th day of October
1996.
/s/ Jean-Marc Bruel /s/ Manfred E. Karobath, M.D.
- --------------------------- -----------------------------
Jean-Marc Bruel Manfred E. Karobath, M.D.
/s/ Jean-Jacques Bertrand
- --------------------------- -----------------------------
Jean-Jacques Bertrand Michael H. Jordan
/s/ Robert E. Cawthorn /s/ Igor Landau
- --------------------------- -----------------------------
Robert E. Cawthorn Igor Landau
/s/ Michel de Rosen /s/ Peter J. Neff
- --------------------------- -----------------------------
Michel de Rosen Peter J. Neff
/s/ James S. Riepe
- --------------------------- -----------------------------
Charles-Henri Filippi James S. Riepe
/s/ Dale F. Frey
- --------------------------- -----------------------------
Dale F. Frey Jean-Pierre Tirouflet
/s/ Claude Helene
- ---------------------------
Claude Helene
Witness:
/s/ Richard B. Young
-------------------------
Richard B. Young
<PAGE>
Exhibit 99
----------
RHONE-POULENC RORER
EMPLOYEE SAVINGS PLAN
As Amended and Restated
Effective January 1, 1992
1
<PAGE>
RHONE-POULENC RORER
EMPLOYEE SAVINGS PLAN
As Amended and Restated
Effective January 1, 1992
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
ARTICLE PAGE
------- ----
<S> <C>
I Purpose.............................................................................. 1
II Definitions.......................................................................... 5
III Participating in the Plan............................................................ 21
IV Participant's Contributions.......................................................... 23
V Employer Contributions............................................................... 29
VI Limitations on Contributions and Allocations......................................... 34
VII Distribution......................................................................... 46
VIII Vesting and Credited Service......................................................... 56
IX Withdrawals and Loans................................................................ 58
X Administration....................................................................... 66
XI The Fund............................................................................. 72
XII Investment by the Trustee............................................................ 74
XIII Amendment or Termination of the Plan................................................. 77
XIV General Provisions................................................................... 79
XV Special Provisions for Top-Heavy Plans............................................... 82
Supplement A - Special Rules for Puerto Rico Participants.................................... 86
Supplement B - Special Matching Contributions for Puerto
Rico Participants who are Members of
the United Auto Workers' Union................................................ 90
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Supplement C - Special Matching Contributions for
Participants who are Members of Warehouse
Employees' Local 169......................................................... 91
Supplement D - Special Matching Contributions for
Participants who are Members of International
Chemical Workers' Union, Local 498........................................... 92
</TABLE>
-ii-
<PAGE>
ARTICLE I
---------
PURPOSE
-------
1.1 The Rhone-Poulenc Rorer Employee Savings Plan is intended to
encourage eligible employees to build financial security by enabling them
to accumulate assets in a trust fund through convenient payroll reductions
which are enhanced by contributions from the Company. The Plan is designed
to supplement employees' income when they retire, as well as to help them
meet preretirement financial emergencies. The trust fund will be invested
in a variety of investment media, including an investment medium dedicated
to Rhone-Poulenc Rorer Inc. Common Stock.
The Plan, when originally established in 1978, was called the
Rorer Group Employees Savings Plan. In 1984, the Plan was amended to
incorporate a 401(k) cash or deferred feature and renamed the Rorer Group
Employees Savings Plus Plan. In 1986, participation in the Plan was
expanded when the Plan accepted transfers of funds from the 401(k) plan
maintained for the benefit of certain employees of the Ethical
Pharmaceutical Division of Revlon, Inc., including USV Pharmaceutical
Corporation, Armour Pharmaceutical Company and Melroy Laboratories, Inc.
With respect to each new Participant, the transferred funds were allocated
to his Basic Contribution Account I, Basic Contribution Account II,
Supplemental Contribution Account I, Supplemental Contribution Account II
-1-
<PAGE>
and Employer Contribution Account I, as appropriate.
The Plan was amended and restated in its entirety, effective as
of January 1, 1989, to incorporate the amendments necessary to comply with
the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Acts of 1986
and 1987 and the Technical and Miscellaneous Revenue Act of 1988. The Plan
was also amended and restated in its entirety, effective July 1, 1989, to
transform the Plan into a leveraged employee stock ownership plan which was
designed to invest primarily in Rorer Group Inc. convertible preferred
stock. In addition, effective July 1, 1989, the Rorer Pharmaceutical
Corporation Hourly Employees Savings Plus Plan was merged into the Plan.
On March 16, 1990, Rhone-Poulenc S.A. ("RP") initiated a tender
offer for approximately 50.1% of the common stock of Rorer Group Inc. The
common stock held by the Plan was tendered by the Trustees in accordance
with the instructions issued by the participants. In addition, the
convertible preferred stock that was held by the Plan was converted into
common stock and tendered to RP. The common stock that was acquired as a
result of the conversion and was tendered but not purchased by RP was
purchased by Rorer Group Inc. pursuant to the terms of the Stock Purchase
Agreement that was entered into as of March 9, 1990. The majority of the
proceeds from the sales of Rorer Group Inc. common stock by the Plan were
utilized to retire the debt incurred by the Plan to purchase the preferred
stock from Rorer Group Inc. in 1989. The remaining proceeds (received
either from
-2-
<PAGE>
the sale of (i) Rorer Group Inc. common stock held by the Plan
and tendered by the Trustees in accordance with the instructions issued by
the participants, or (ii) Rorer Group Inc. common stock acquired by the
Plan as a result of the conversion of the convertible preferred stock held
by the Plan and tendered by the Trustees or purchased by Rorer Group Inc.)
were allocated to the Participant's Accounts and shall be invested in
accordance with their directions.
The Plan was amended and restated in its entirety, effective July
1, 1990, to eliminate the employee stock ownership feature from the Plan.
Accordingly, the Plan now constitutes a profit sharing plan with a 401(k)
cash or deferred feature. The name of the Plan was changed to the Rhone-
Poulenc Rorer Employees Savings Plus Plan effective July 15, 1990. As a
result of the sale of all of the convertible preferred stock by the Plan
and the elimination of the employee stock ownership feature, the Employer
Contribution Accounts I and II, respectively, have been combined into one
Employer Contribution Account.
The Plan is now amended and restated in its entirety, effective
January 1, 1992, except where an earlier effective date is provided herein
or otherwise required by applicable law, to incorporate certain amendments
necessary to comply with recent statutory and regulatory changes, to change
the name of the Plan to the Rhone-Poulenc Rorer Employee Savings Plan and
to reflect certain changes in the administration of the Plan. In addition,
the Armour Pharmaceutical Company Hourly Employee Savings Plus
-3-
<PAGE>
Plan and the Rorer Group Inc. Payroll Stock Ownership Plan are being merged
into the Plan effective December 31, 1991 and January 1, 1992,
respectively. The Plan is also being amended to incorporate certain
provisions relating to Participants who are residents of the Commonwealth
of Puerto Rico. Except where a different effective date is provided herein
or otherwise required by applicable law, the terms of the Plan, as amended
and restated, shall apply only to an Employee who terminates employment on
or after January 1, 1992. The rights and benefits, if any, of other
employees shall be determined in accordance with the provisions of the Plan
as it existed prior to such date.
-4-
<PAGE>
ARTICLE II
----------
DEFINITIONS
-----------
2.1 "Accounts" shall mean all of the various separate accounts
--------
maintained by the Trustee for each Participant.
(a) "Basic Contribution Account I" shall mean the Account to
----------------------------
which are credited a Participant's contributions made pursuant to Section
4.1 prior to July 1, 1984.
(b) "Basic Contribution Account II" shall mean the Account to
-----------------------------
which are credited a Participant's contributions made pursuant to Section
4.1 after June 30, 1984 and to which is credited (or debited) the net
increase or decrease apportioned to such contributions.
(c) "Employee Valuation Account" shall mean the Account to which
--------------------------
is credited (or debited) the net increase or decrease apportioned to each
Participant's Basic Contribution Account I and Supplemental Contribution
Account I as of each Valuation Date.
(d) "Employer Contribution Account" shall mean the Account to
-----------------------------
which are credited Employer Contributions to the Plan.
(e) "Employer Valuation Account" shall mean the Account to which
--------------------------
is credited (or debited) the net increase or decrease apportioned to each
Participant's Employer Contribution Account as of each Valuation Date.
(f) "PAYSOP Account" shall mean the Account to
--------------
-5-
<PAGE>
which are credited contributions which had previously been held in the
Rorer Group Inc. Payroll Stock Ownership Plan and which were transferred to
this Plan effective January 1, 1992.
(g) "Rollover Account" shall mean the Account to which are
----------------
credited a Participant's contributions made pursuant to Section 4.10 and to
which is credited (or debited) the net increase or decrease apportioned to
such contributions.
(h) "Supplemental Contribution Account I" shall mean the Account
-----------------------------------
to which are credited a Participant's contributions made pursuant to
Section 4.2 for periods prior to July 1, 1984.
(i) "Supplemental Contribution Account II" shall mean the Account
------------------------------------
to which are credited a Participant's contributions made pursuant to
Section 4.2 for periods after June 30, 1984 and to which is credited (or
debited) the net increase or decrease apportioned to such contributions.
(j) "Supplemental Employer Contribution Account" shall mean the
------------------------------------------
Account to which are credited Supplemental Employer Contributions made
pursuant to Section 5.2 and to which is credited (or debited) the net
increase or decrease apportioned to such contributions.
2.2 "Activity Date" shall mean a date on which an Eligible
-------------
Employee may (a) become or cease to be a Participant and (b) make an
investment or reinvestment selection pursuant to Article XII hereof. The
Activity Dates for purposes of the Plan shall be the first day of the month
of each calendar quarter
-6-
<PAGE>
during the Plan Year, or such other dates as the Committee may determine,
in its sole discretion. The Committee may establish different Activity
Dates and required notice periods for different purposes under the Plan.
2.3 "Affiliated Company" shall mean any entity (a) which, with
------------------
the Employer, constitutes (1) a "controlled group of corporations" within
the meaning of Section 414(b) of the Code, (2) a "group of trades or
businesses under common control" within the meaning of Section 414(c) of
the Code, or (3) an "affiliated service group" within the meaning of
Section 414(m) of the Code or (b) which is required to be aggregated with
the Employer pursuant to regulations under section 414(o) of the Code and
regulations issued thereunder. An entity shall be considered an Affiliated
Company only with respect to such period as the relationship described in
the preceding sentence exists. When the term "Affiliated Company" is used
in Section 6.9 or 6.10, Sections 414(b) and (c) of the Code shall be deemed
modified by application of the provisions of Section 415(h) of the Code,
which substitute the phrase "more than 50 percent" for the phrase "at least
80 percent" each place it appears in Section 1563(a)(1) of the Code which
is then incorporated by reference in Sections 414(b) and (c) of the Code.
2.4 "Anniversary Date" shall mean the last day of each Plan
----------------
Year.
2.5 "Basic Contributions" shall mean the contributions made by a
-------------------
Participant pursuant to Section 4.1.
-7-
<PAGE>
2.6 "Board of Directors" shall mean the Board of Directors of
------------------
the Company.
2.7 "Code" shall mean the Internal Revenue Code of 1986, as
----
amended.
2.8 "Committee" shall mean the persons appointed by the Board of
---------
Directors to supervise the administration of the Plan, as hereinafter
provided.
2.9 "Common Stock" shall mean the common stock of the Company.
------------
2.10 "Common Stock Fund" shall mean the Investment Medium
-----------------
dedicated to the acquisition and holding of Common Stock.
2.11 "Company" shall mean Rhone-Poulenc Rorer Inc., a
-------
Pennsylvania corporation, or its successors.
2.12 "Compensation" shall mean with respect to all Participants,
------------
the base wages of a Participant paid by an Employer, exclusive of overtime,
commissions, bonuses, any contributions to any qualified pension or other
fringe benefit programs, severance pay and amounts identified by the
Employer as payment toward business expenses incurred by the Participant
without direct reimbursement, prior to any reduction in compensation
pursuant to Section 4.1 and 4.2 or pursuant to any plan or program
maintained by the Employer pursuant to Section 125 of the Code. For
purposes of Article VI, Compensation shall mean all remuneration which is
required to be reported as wages on the Participant's Form W-2, and, unless
the Company elects otherwise, any Basic or Supplemental Contributions to
this Plan
-8-
<PAGE>
or any reductions in compensation pursuant to any plan or program
maintained by the Employer pursuant to Section 125 of the Code; provided,
however, that only that remuneration paid to the Employee while he was an
Eligible Employee shall be taken into account. Compensation in excess of
$200,000 ($150,000 for Plan Years beginning on or after January 1, 1994)
for any Plan Year (adjusted to reflect any cost-of-living increases
provided in accordance with Section 415(d) of the Code) shall be
disregarded. In determining Compensation for purposes of the foregoing
limitation, the rules of Section 414(q)(6) of the Code shall apply, except
that in applying such rules, the term "family" shall include only the
Spouse of the Employee and any lineal descendants who have not attained age
19 before the close of the Plan Year. If, as a result of the application
of Code Section 414(q)(6), the limitation is exceeded, then the limitation
shall be prorated among the affected family members in proportion to each
such member's Compensation as determined under this Section prior to
application of the limitation.
2.13 "Earliest Retirement Age" shall mean for purposes of
-----------------------
Section 2.31 the earlier of (a) the date on which the Participant is
entitled to a distribution under the Plan or (b) the later of (i) the date
the Participant attains age 50, or (ii) the earliest date on which, under
the Plan, the Participant could elect to receive benefits if the
Participant incurred a Termination Date.
2.14 "Effective Date" shall mean January 1, 1978.
--------------
-9-
<PAGE>
"Amendment Effective Date" shall mean January 1, 1992.
2.15 "Eligible Employee" shall mean any Employee other than (i)
-----------------
an Employee who is such solely by reason of being a leased employee within
the meaning of Section 414(n) of the Code, (ii) an Employee whose terms and
conditions of employment are determined through collective bargaining shall
not be eligible to participate in the Plan unless the collective bargaining
agreement so provides, (iii) an Employee who is a non-resident alien, and
(iv) an Employee who is a temporary employee which shall mean, for the
purpose of this Section 2.15, any person who is hired for a specific
project or for a limited duration. "Full-Time Employee" shall mean an
------------------
Eligible Employee working the regularly scheduled work week for the
location at which he is employed.
2.16 "Employee" shall mean all individuals employed by the
--------
Company or an Affiliated Company, including officers, shareholders or
directors who are employees and leased employees within the meaning of
Section 414(n)(2) of the Code.
2.17 "Employer" shall mean the Company or any Affiliated Company
--------
which has duly adopted the Plan with the consent of the Board of Directors.
2.18 "Employer Contribution" shall mean the contribution made by
---------------------
an Employer pursuant to Section 5.1.
2.19 "ERISA" shall mean the Employee Retirement Income Security
-----
Act of 1974, as amended.
2.20 "415 Compensation" shall mean a Participant's
----------------
-10-
<PAGE>
remuneration including wages, salaries, fees for professional services and
other amounts received for personal services actually rendered in the
course of employment with an Employer maintaining the Plan or an Affiliated
Company to the extent such amounts are included in gross income, including
overtime, bonuses, premium time, etc., but excluding the following:
(a) contributions to a deferred compensation plan which, without
regard to Section 415 of the Code, are not includable in the Participant's
gross income for the taxable year in which contributed;
(b) contributions made on behalf of a Participant to a simplified
employee pension described in Section 408(k) of the Code;
(c) distributions from a deferred compensation plan (regardless
of whether such amounts are includable in gross income);
(d) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by a Participant either
becomes freely transferable or is no longer subject to a substantial risk
of forfeiture;
(e) amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; or
(f) other amounts which receive special tax benefits, such as
premiums for group term life insurance (to the
-11-
<PAGE>
extent excludable from gross income) or Employer contributions towards the
purchase of an annuity contract described in Section 403(b) of the Code.
For purposes of the definition of "Key Employee" in Section 15.2,
415 Compensation shall include elective contributions that are excluded
from gross income under Section 125, 402(e)(3), 402(h) or 403(b) of the
Code.
2.21 "Fund" shall mean the separate fund established for this
----
Plan, administered under the Trust Agreement, out of which benefits payable
under this Plan shall be paid.
2.22 "Highly Compensated Employee" shall mean:
---------------------------
(a) each Employee who, with respect to the Company or an
Affiliated Company, performed services (an "Active Employee") during the
Plan Year for which a determination is being made (the "Determination
Year") and who during such Determination Year, or the preceding
Determination Year:
(1) was at any time a 5% owner (as defined in Section
416(i) of the Code and the regulations issued thereunder);
(2) received 415 Compensation in excess of $75,000
(adjusted to reflect any cost-of-living increases provided in accordance
with Section 415(d) of the Code);
(3) received 415 Compensation in excess of $50,000
(adjusted to reflect any cost-of-living increases provided in accordance
with Section 415(d) of the Code) and was in the top 20% of Active Employees
(based on 415 Compensation
-12-
<PAGE>
received) during such year; or
(4) was an officer (as defined in Section 416(i) of the
Code and the regulations issued thereunder) and received 415 Compensation
greater than 50% of the amount in effect under Section 415(b)(1)(A) of the
Code for the calendar year in which a determination is made.
Notwithstanding the foregoing, the provisions of paragraph (2), (3) or (4)
above shall not cause an Employee to be treated as a Highly Compensated
Employee for the Determination Year of reference unless such Employee is
one of the top 100 Active Employees (based on 415 Compensation received)
during such Determination Year and was not a Highly Compensated Employee in
accordance with the provisions of paragraph (2), (3) or (4) above for the
preceding Determination Year (without regard to this sentence).
(b) For purposes of determining the number of Employees in the
top 20% of Active Employees in paragraph (a)(3), Employees described in
Section 414(q)(8) of the Code shall be excluded to the extent (i) permitted
under Section 414(q)(8) of the Code and regulations thereunder and (ii)
elected by the Committee.
(c) For purposes of paragraph (a)(4), no more than 50 Employees
(or, if lesser, the greater of three Employees or 10% of the Employees,
excluding Employees described in section 414(q)(8) of the Code disregarded
for purposes of identifying the top 20% of Active Employees) shall be
treated as officers, and if
-13-
<PAGE>
for any Plan Year no officer is described in such paragraph, the highest
paid officer for such Plan Year shall be treated as described in such
paragraph.
(d) If any person is a member of the family of a 5% owner who is
an Employee or former Employee or of a Highly Compensated Employee in the
group consisting of the ten Highly Compensated Employees with the greatest
415 Compensation for the Plan Year, such person shall not be considered a
separate Employee. In such case, the family member (or family members) and
5% owner or Highly Compensated Employee shall be treated as a single Highly
Compensated Employee receiving 415 Compensation and Plan contributions
equal to the sum of the 415 Compensation and Plan contributions of the
family member(s) and the 5% owner or Highly Compensated Employee. The term
"family" shall mean, with respect to any Employee or former Employee, such
Employee's spouse and lineal ascendants or descendants and the spouses of
such lineal ascendants or descendants.
(e) A former Employee shall be treated as a Highly Compensated
Employee, if such Employee was a Highly Compensated Employee while an
active Employee in either the Plan Year in which such Employee separated
from service or in any Plan Year ending on or after his 55th birthday.
(f) The determination of Highly Compensated Employee made
pursuant to this Section shall be made in accordance with Section 414(q) of
the Code and the regulations issued thereunder.
-14-
<PAGE>
(g) For purposes of this Section, the term "415 Compensation"
shall include Basic and Supplemental Contributions under this Plan.
2.23 "Hour of Service" shall mean an hour
---------------
(a) for which an Employee is directly or indirectly paid or
entitled to payment by an Employer or an Affiliated Company for the
performance of employment duties;
(b) for which back pay is either awarded or agreed to,
irrespective of mitigation of damages;
(c) for which an Employee is directly or indirectly paid or
entitled to payment by an Employer or an Affiliated Company on account of a
period of time during which no duties are performed due to vacation,
holiday, illness, incapacity, jury duty, lay-off, or leave of absence;
(d) each hour that constitutes part of the Employee's customary
work week during any period of absence in the armed forces of the United
States, provided that (1) such absence is with the approval of the Employer
or pursuant to a national conscription law, (2) the Employee receives an
honorable discharge, and (3) the Employee returns to employment with the
Employer within 90 days after his release from active service or any longer
period during which his right to reemployment is protected by law.
There shall be excluded from the above those periods during which payments
are made or due solely for the purpose of complying with applicable
workers' compensation, unemployment compensation or
-15-
<PAGE>
disability insurance laws. No more than 501 Hours of Service shall be
credited under Subsection (c) for any period during which no duties are
performed except to the extent otherwise provided in this Plan. An Hour of
Service shall not be credited where an Employee is being reimbursed solely
for medical or medically related expenses. Hours of Service shall be
credited in accordance with the rules set forth in DOL Reg. 2530.200b-2(b)
and (c).
Notwithstanding the foregoing, the Committee may, in accordance
with uniform rules nondiscriminatorily applied, elect to credit Hours of
Service using one or more of the following equivalencies:
Basis Upon Which Records Credit Granted to
Are Maintained Individual for Period
------------------------ ---------------------
shift actual hours for full shift
day 10 hours of service
week 45 hours of service
semi-monthly period 95 hours of service
month 190 hours of service
2.24 "Investment Media" shall mean those funds, contracts,
----------------
obligations or other modes of investment selected by the Committee to which
each Participant may direct the investment of the assets of his Accounts.
2.25 "Non-Highly Compensated Employee" shall mean an Employee
-------------------------------
who is not a Highly Compensated Employee.
2.26 "Participant" shall mean an Eligible Employee who is
-----------
entitled to participate and who elects to participate in this Plan under
Article III hereof.
-16-
<PAGE>
2.27 "Permanent and Total Disability" shall mean a Participant's
------------------------------
suffering a disability of a nature which enables the Participant to qualify
for and to receive disability benefits under the Federal Social Security
Act.
2.28 "Permanently and Totally Disabled Employee" shall mean a
-----------------------------------------
Participant who has suffered a Permanent and Total Disability.
2.29 "Plan" shall mean the Rhone-Poulenc Rorer Employee Savings
----
Plan, as set forth herein and as hereafter amended from time to time.
2.30 "Plan Year" shall mean the calendar year.
---------
2.31 "Qualified Domestic Relations Order" shall mean a judgment,
----------------------------------
decree or order (including approval of a property settlement agreement)
made pursuant to a state domestic relations law (including a community
property law) which:
(a) relates to the provision of child support, alimony payments
or marital property rights to a spouse, former spouse, child or other
dependent of a Participant (the "Alternate Payee");
(b) creates or recognizes the existence of the Alternate Payee's
right to, or assigns to the Alternate Payee the right to, receive all or a
portion of the benefits payable to a Participant under this Plan;
(c) specifies (i) the name and last known mailing address (if
any) of the Participant and each Alternate Payee covered by the order,
(ii) the amount or percentage of the
-17-
<PAGE>
Participant's Plan benefits to be paid to the Alternate Payee, or the
manner in which such amount or percentage is to be determined, and (iii)
the number of payments or the period to which the order applies and each
plan to which the order relates; and
(d) does not require the Plan to (i) provide any type or form of
benefit, or any option not otherwise provided under the Plan, (ii) provide
increased benefits, or (iii) pay benefits to the Alternate Payee that are
required to be paid to another Alternate Payee under a prior Qualified
Domestic Relations Order. Notwithstanding the foregoing, a Qualified
Domestic Relations Order may provide that distribution commence immediately
or at any other time specified in the Qualified Domestic Relations Order,
but not later than the latest date benefits would be payable to the
Participant under Article VII, if the Order directs (i) that the payment of
the benefits be determined as if the Participant had retired on the date on
which payment is to begin under such Order, taking into account only the
balance standing to the Participant's credit in his Accounts on such date
and (ii) that the payment be made in a form in which such benefits may be
paid under the Plan to the Participant.
2.32 "Required Distribution Date" shall mean the April 1 of the
--------------------------
Plan Year following the later of (a) the Plan Year in which the Participant
attains age 70 1/2; or (b) in the case of a Participant who attained age 70
1/2 before January 1, 1988, and who is a not 5% owner (as defined in
Section 416 of the Code) at
-18-
<PAGE>
any time during the five Plan Year period ending in the Plan Year in which
the Participant attains age 70 1/2, the Plan Year in which the Participant
retires. If a Participant described in clause (b) becomes a 5% owner at any
time after such five Plan Year period, his Required Distribution Date shall
be April 1 of the calendar year following the calendar year in which the
Plan Year in which he becomes a 5% owner ends. Notwithstanding the
foregoing, in the case of a Participant who attained age 70 1/2 on or after
January 1, 1988, but before January 1, 1989, is not a 5% owner, and has not
had a Separation from Service before January 1, 1989, Required Distribution
Date shall mean April 1, 1990.
2.33 "Retirement" shall mean the termination of employment of an
----------
Employee who is entitled to an immediate receipt of retirement benefits
under a pension or retirement plan maintained or contributed to by the
Employer. If a Participant does not participate in such a Plan, the
Participant's "Retirement" under this Plan shall be the later of the date
on which (a) the Participant attains age 55, (b) completes 10 years of
service (as defined in Section 8.2) and (c) ceases to be employed by the
Employer and all Affiliated Companies on or after his attainment of such
age and years of service.
2.34 "Rollover Contribution" shall mean the contributions made
---------------------
by a Participant pursuant to Section 4.10.
2.35 "Spouse" shall mean the spouse or surviving spouse of the
------
Participant, as the context requires; provided,
-19-
<PAGE>
that a former spouse shall be treated as the spouse or surviving spouse to
the extent provided under a Qualified Domestic Relations Order.
2.36 "Supplemental Contributions" shall mean the contributions
--------------------------
made by a Participant pursuant to Section 4.2.
2.37 "Supplemental Employer Contribution" shall mean the
----------------------------------
contributions, if any, made by an Employer pursuant to Section 5.2.
2.38 "Termination Date" shall mean the earlier of the dates on
----------------
which an Employee dies or his employment terminates for any reason.
2.39 "Trust Agreement" shall mean the Trust Agreement(s)
---------------
executed under this Plan.
2.40 "Trustee" shall mean the corporate trustee(s) or one or
-------
more individuals collectively appointed and acting under the Trust
Agreement.
2.41 "Valuation Date" shall mean the last business day of each
--------------
month and each other date on which a valuation of the Fund is made.
-20-
<PAGE>
ARTICLE III
-----------
PARTICIPATING IN THE PLAN
-------------------------
3.1 Eligibility. All Employees who were Participants as of the
-----------
Amendment Effective Date shall continue to participate in the Plan without
interruption. An Eligible Employee (a) who is a Full-Time Employee shall
be eligible to become a Participant on any Activity Date coincident with or
following the Eligible Employee's completion of three months of employment
and (b) who is not a Full-Time Employee shall be eligible to become a
Participant on any Activity Date following the Eligible Employee's
completion of one year of employment. A Participant who suffers a break in
service, as defined in Section 8.2, shall become eligible to participate
again in the Plan on the first Activity Date following his reemployment in
an Eligible Employee classification.
3.2 Participation. Participants shall share in Employer
-------------
Contributions and Supplemental Employer Contributions under Sections 5.1
and 5.2 for any Plan Year during which they make Basic Contributions to the
Plan.
3.3 Application for Participation. Participation in
-----------------------------
this Plan is voluntary. Each Eligible Employee who elects to become a
Participant shall become a Participant as of an Activity Date upon such
notice and after completing such enrollment and application forms as may be
required by the Committee. Each Eligible Employee who becomes a
Participant shall be deemed to
-21-
<PAGE>
have agreed to the terms and requirements of the Plan and the Trust
Agreement.
3.4 Data. Each Participant shall furnish to the Committee such
----
data as may be requested by the Committee for the determination of his
rights and benefits under the Plan.
3.5 Termination of Participation. A Participant's participation
----------------------------
will end when he and his beneficiaries have received all benefits due to
them under the Plan.
-22-
<PAGE>
ARTICLE IV
----------
PARTICIPANT'S CONTRIBUTIONS
---------------------------
4.1 Basic Contributions. Subject to the limitations set forth
-------------------
in Article VI, a Participant shall authorize the Employer, on forms
provided by the Committee, to reduce his Compensation by either 1%, 2%, 3%,
4%, 5% or 6%, up to a maximum of $6,000, adjusted to the nearer whole
dollar, as a Basic Contribution to the Plan.
4.2 Supplemental Contributions. Subject to the limitations set
--------------------------
forth in Article VI, a Participant who elects to make a Basic Contribution
of 6% (or $6,000, if less) may also elect to authorize the Employer, on
forms provided by the Committee and subject to any limitations imposed by
the Committee, to reduce his Compensation by either 1%, 2%, 3%, 4%, 5% or
6% (calculated by whole percentage points and adjusted to the nearer whole
dollar) as a Supplemental Contribution to the Plan; provided, however, that
such amount, when added to the Participant's Basic Contributions for the
Plan Year, shall not exceed the dollar limitation set forth in Section
402(g) of the Code.
4.3 How Contributions Are Made. Basic and Supplemental
--------------------------
Contributions shall be made by payroll reduction in accordance with the
consent of the Participant granted pursuant to the terms of Sections 4.1
and 4.2.
4.4 When Contributions Are Made. Withholding of a
---------------------------
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<PAGE>
Participant's contributions shall begin as of the first Activity Date
following a timely receipt of his written consent to withhold and shall be
completed in accordance with the Participant's instructions.
4.5 Cash Contributions. Cash contributions in lieu of payroll
------------------
reductions are not permissible.
4.6 Change of Percentage Rate. A Participant may elect to
-------------------------
change his percentage rate of contribution under Section 4.1 or 4.2 (within
the limits set forth in those Sections) as of any Activity Date. Any such
change shall be made in accordance with such written, electronic or
telephonic procedures as may be prescribed by the Committee.
4.7 Discontinuance of Contributions. By giving prior notice to
-------------------------------
the Committee, a Participant may elect to discontinue his Basic
Contributions and/or his Supplemental Contributions at any time. If a
Participant elects to discontinue his Basic Contributions, his ability to
make Supplemental Contributions will also cease. A Participant who has
discontinued either his Basic or Supplemental Contributions shall not be
permitted thereafter to make such Contributions until the Activity Date
next following the effective date of such discontinuance. Notice of
discontinuance shall be given in accordance with such written, electronic
or telephonic procedures as may be prescribed by the Committee.
-24-
<PAGE>
4.8 Return of Basic and Supplemental Contributions.
----------------------------------------------
(a) Notwithstanding any provision in the Plan to the contrary, a
Participant's Basic and Supplemental Contributions made under this Plan and
his elective deferrals (as defined in Section 402(g) of the Code) made
under any other plan or arrangement maintained by the Employer or an
Affiliated Company for a taxable year shall not exceed the dollar
limitation in Section 402(g) of the Code. Furthermore, the Participant
should notify the Committee in writing no later than the March 1 following
the Participant's taxable year that his Basic and Supplemental
Contributions (reduced by amounts previously distributed pursuant to
Sections 6.8 or 6.9) when added to his elective deferrals under any other
plan or arrangement (whether or not maintained by an Employer or Affiliated
Company) exceed the limit imposed by the Code Section 402(g) for the
taxable year in which the deferrals occurred. Not later than the April 15
following the close of the Participant's taxable year, the Committee shall
cause the Trustee to distribute to the Participant the excess deferrals
(adjusted for any income or loss attributable thereto through the date of
distribution and subject, however, to the withholding of taxes and other
amounts as though such amounts were current remuneration). A Participant
shall be deemed to have made a claim for distribution of excess deferrals
from the Plan to the extent that his Basic and Supplemental Contributions
together with his elective deferrals under any other plan or arrangement
maintained by the Employer or
-25-
<PAGE>
an Affiliated Company exceed the limit imposed by Code Section 402(g) for
the taxable year.
(b) Effective January 1, 1992, in the event a Participant
receives a distribution of Basic Contributions pursuant to paragraph (a) of
this Section, the Participant shall forfeit any Employer or Supplemental
Employer Contributions (plus income thereon to the date of distribution)
allocated to the Participant by reason of the distributed Basic
Contributions. Amounts forfeited shall be used to reduce future Employer
Contributions made pursuant to Section 5.1.
4.9 Transfer to Trustee. Each Employer shall transfer to the
-------------------
Trustee the Basic and Supplemental Contributions of each Participant as
soon as practicable, but no more than thirty (30) days after the end of the
calendar month in which such contributions were withheld from the
Participant's Compensation.
4.10 Rollover Contributions.
----------------------
(a) In accordance with procedures established by the Committee
and applied on a uniform basis, an Eligible Employee may transfer or have
transferred directly to the Fund, from any qualified retirement plan of a
former employer, all or a portion of his vested accrued benefit in the
distributing plan, except that the amount being transferred shall not
contain nondeductible contributions made to the distributing plan by the
Eligible Employee, unless the transfer to the Fund is directly from the
funding agent of the distributing plan.
(b) In addition, an Eligible Employee who has
-26-
<PAGE>
established an individual retirement account to hold distributions received
from qualified retirement plans of former employers may, in accordance with
procedures established by the Committee and applied on a uniform basis,
transfer all of the assets of such individual retirement account to the
Fund. Such individual retirement account shall not contain nondeductible
contributions made by the Eligible Employee while he was a participant in
the plans of his former employers.
(c) The distributions transferred by or for an Eligible Employee
from another qualified retirement plan or from an individual retirement
account shall be credited to the Participant's Rollover Account.
(d) The Trustee shall not accept a distribution from any other
qualified retirement plan or from an individual retirement account unless
the following conditions are met:
(1) the distribution being transferred must come directly
from the fiduciary of the plan of the former employer, or it must come from
the Eligible Employee within 60 days after the Eligible Employee received a
distribution from such other qualified retirement plan or individual
retirement account;
(2) distributions from a plan for a self-employed person
shall not be transferred to this Plan, unless the transfer is directly to
the Fund from the funding agent of the distributing plan;
(3) the distribution being transferred will
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<PAGE>
not cause the Plan to be a direct or indirect transferee of a plan to which
the joint and survivor annuity requirements of Sections 401(a)(11) and 417
of the Code apply; and
(4) the distribution being transferred will not cause the
Plan to violate the requirements set forth in Section 411(d)(6) of the Code
(and the regulations issued thereunder).
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<PAGE>
ARTICLE V
---------
EMPLOYER CONTRIBUTIONS
----------------------
5.1 Matching Contributions. Except as is otherwise provided in
----------------------
Supplements B, C and D, and subject to the limitations set forth in Article
VI, each Participant's Basic Contributions shall be matched on an annual
basis by an Employer Contribution up to a maximum Employer Contribution of
$3,000 for a Participant in a Plan Year. The Basic Contributions shall be
matched by Employer Contributions in accordance with the following
schedule:
Basic Contribution Employer Contribution
(as a % of Compensation) (as a % of Basic Contribution)
------------------------ ------------------------------
1st 1% 100%
2nd 1% 75%
3rd 1% 50%
4th-6th 1% 25%
Effective September 1, 1993, the Basic Contributions shall be matched by
Employer Contributions in accordance with the following schedule:
Basic Contribution Employer Contribution
(as a % of Compensation) (as a % of Basic Contribution)
------------------------ ------------------------------
1st 1% 100%
2nd 1% 90%
3rd 1% 80%
4th-6th 1% 50%
Effective September 1, 1993, the Company may, with respect to the
first Plan Year in which an Eligible Employee elects to become a
Participant pursuant to Article III hereof, make an additional Employer
Contribution of $100 on behalf of the Participant. The Company may, in its
sole discretion, elect to
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<PAGE>
make an Employer Contribution that is in excess of the amount required to
be contributed by the Company; provided, however, that in no event shall
the total Employer Contributions for any Participant for any Plan Year
exceed the $3,000 limitation referenced above.
5.2 Supplemental Employer Contributions. As soon as possible
-----------------------------------
after the end of the Plan Year, the Company, in its discretion, may
determine to make a Supplemental Employer Contribution, subject to the
limitations set forth in Article VI. The Supplemental Employer Contribution
for any Plan Year under this Section will be made no later than the
expiration of the period within which such contribution may be paid and
deducted for the purpose of federal income taxes. Supplemental Employer
Contributions shall be allocated to the Supplemental Employer Contribution
Account of each Participant who qualifies for Employer Contributions under
Section 3.2 and who either (i) is in the active employment of an Employer
or an Affiliated Company on the last day of the Plan Year for which such
Supplemental Employer Contributions are made or (ii) dies, suffers a
Permanent and Total Disability, or has a Retirement during the Plan Year;
provided, however, that if this method of allocating the Supplemental
Employer Contribution for a Plan Year (A) would not serve to prevent the
Plan from failing to satisfy the requirements set forth in Sections 6.3 and
6.5, respectively (such failure to be determined without regard to the
Supplemental Employer Contribution) and/or (B) would result in the Plan's
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<PAGE>
failure to satisfy either of the requirements set forth in Sections 6.3 and
6.5, then, but only to the extent necessary to satisfy the requirements set
forth in Sections 6.3 and 6.5 (as determined by the Committee in its sole
discretion), the allocation of the Supplemental Employer Contribution for
the Plan Year shall be made only to those Participants who otherwise
satisfy the requirements set forth in (i) and (ii) above and who are also
Non-Highly Compensated Employees. Supplemental Employer Contributions shall
be treated the same as the Employer Contributions for all purposes under
the Plan, except as otherwise provided herein.
5.3 Fund. The contributions deposited by the Employer in the
----
Fund in accordance with this Article V (and Article IV) shall constitute a
fund held for the benefit of Participants and terminated or retired
Employees, and their eligible survivors under and in accordance with this
Plan. No part of the principal or income of the Fund shall be used for, or
diverted to purposes other than those which are exclusively for the benefit
of such Participants, terminated or retired Employees, and their eligible
survivors including necessary administrative costs.
5.4 Determination of Amount. If any Employer in any Plan Year
-----------------------
makes a contribution in excess of the amount allowable as a deduction for
such fiscal year, the amount of the excess shall be returned to the
Employer in accordance with Section 5.7
5.5 When Contributions Are Made. Employer Contributions shall
---------------------------
be paid to the Trustee at the time that a
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<PAGE>
Participant's Basic and Supplemental Contributions are forwarded to the
Trustee. Supplemental Employer Contributions shall be made at the time set
forth in Section 5.2 hereof.
5.6 Form of Contributions. Employer contributions shall be made
---------------------
in cash or shares of Common Stock.
5.7 Deductibility of Contributions. All Basic, Employer and
------------------------------
Supplemental Employer Contributions under the Plan are conditioned upon
their deductibility under Section 404 of the Code and, to the extent the
deduction is disallowed, shall be returned to the Employer or the
Participant as appropriate within one year after the disallowance of the
deduction. Notwithstanding the foregoing, the maximum amount which may be
returned to the Employer or a Participant shall be the value of the
contribution on the date it is returned.
5.8 Mistake. In the case of a contribution which is made under
-------
a mistake of fact, such contribution shall be returned to the Employer or
the Participant, as appropriate, within one year after the payment of the
contribution. Notwithstanding the foregoing, the maximum amount which may
be returned to the Employer or a Participant shall be the value of the
contribution on the date it is returned.
5.9 Contributions Conditioned on Plan Qualification. All
-----------------------------------------------
contributions under the Plan are conditioned on initial qualification of
the Plan under Sections 401(a) and 401(k) of the Code, and if the Plan is
found not to so qualify, it shall be terminated in accordance with the
provisions of Section 13.2 and
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<PAGE>
the Fund shall be distributed to the Participants and the Employer, as
appropriate, within one year after the denial of such initial
qualification.
5.10 Records. All contributions transferred to the Trustee
-------
under the Plan shall be accompanied by written instructions from the
Committee to the Trustee that: (a) identify the Participant on whose
behalf the contribution is being made, (b) state whether the contribution
represents a Basic Contribution, Supplemental Contribution, Employer
Contribution or Supplemental Employer Contribution and (c) direct the
investment of the contribution in accordance with the Participant's
investment directions pursuant to Article XII.
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<PAGE>
ARTICLE VI
----------
LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
--------------------------------------------
6.1 General Requirements. For any Plan Year, (a) contributions
--------------------
under the Plan shall not exceed the limitations on deductions imposed under
Sections 404(a)(3) and 404(a)(9) of the Code, (b) the Plan shall satisfy
the coverage requirements of Section 410(b)(1) of the Code, (c) the Plan
shall satisfy the average deferral percentage test set forth in Section 6.3
and (d) effective January 1, 1987, the Plan shall satisfy the average
contribution percentage test set forth in Section 6.5.
6.2 Allocations. Each Employer Contribution shall be allocated
-----------
as of the day the contribution is received by the Trustee with respect to
each Participant in accordance with Section 5.1. Supplemental Employer
Contributions shall be allocated to each Participant eligible to
participate in the contribution under Section 5.2 as soon as possible after
the close of the Plan Year for which the contribution is made, and shall be
based on the amount of the Basic Contributions made by such Participant
during the Plan Year to total Basic Contributions of all eligible
Participants for such Plan Year.
6.3 Average Deferral Percentage Test. Effective January 1,
--------------------------------
1987, the average deferral percentage for Highly Compensated Employees who
are Eligible Employees shall not exceed the greater of (a) or (b) as
follows:
(a) The average deferral percentage for all
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<PAGE>
Eligible Employees who are Non-Highly Compensated Employees, multiplied by
1.25, or
(b) The average deferral percentage for all Eligible Employees
who are Non-Highly Compensated Employees, multiplied by 2.0; provided that
the average deferral percentage for Highly Compensated Employees who are
Eligible Employees may not exceed the average deferral percentage for
Eligible Employees who are Non-Highly Compensated Employees by more than
two percentage points.
6.4 Average Deferral Percentage. For purposes of Section 6.3,
---------------------------
the term "average deferral percentage" as applied to a specified group of
Eligible Employees shall mean the average of the ratios, calculated
separately for each such Eligible Employees in such group of:
(a) the amount of Basic and Supplemental Contributions
(excluding any such contributions taken into account in determining the
average contribution percentage in Section 6.5(a), distributed to a Non-
Highly Compensated Employee pursuant to a deemed claim for distribution
under Section 4.8, or returned pursuant to Section 6.9) paid to the Plan on
behalf of each such Participant for such Plan Year, to
(b) the Participant's Compensation for such Plan Year; provided,
however, that only that Compensation paid to a Participant while he was an
Eligible Employee shall be taken into account.
For the purposes of this Section, the deferral
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<PAGE>
percentage of a Highly Compensated Employee who is an Eligible Employee
under this Plan and who has made elective deferrals under any other
qualified cash or deferred arrangement maintained by the Company or an
Affiliated Company pursuant to Section 401(k) of the Code shall be the sum
of his deferral percentages under all such plans (excluding those that are
not permitted to be aggregated with the Plan under Treas. Reg. (S)1.401(k)-
1(b)(3)(ii)(B)) for the Plan Year. In addition, this Plan shall be
aggregated and treated as a single plan with other plans maintained by the
Company or an Affiliated Company to the extent that this Plan is aggregated
with any such other plan for purposes of satisfying Section 410(b) (other
than section 410(b)(2)(A)(ii)) of the Code.
6.5 Average Contribution Percentage Test. The term "average
------------------------------------
contribution percentage test" shall mean the numerical test set forth in
Section 6.3 substituting for the term "average deferral percentage" the
term "average contribution percentage".
(a) The term "average contribution percentage" as applied to a
specified group of Eligible Employees shall mean the average of the ratios,
calculated separately for each such Participant in such group of:
(1) the amount of Employer Contributions and Supplemental
Employer Contributions paid to the Plan on behalf of such Participant for
such Plan Year (excluding any such contributions forfeited pursuant to
Section 4.8 or 6.8(b)) and, at the discretion of the Employer, Basic and
Supplemental
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<PAGE>
Contributions, to
(2) the Participant's Compensation for such Plan Year;
provided, however, that only that Compensation paid to a Participant while
he was an Eligible Employee shall be taken into account.
(b) Basic and Supplemental Contributions may be taken into
account under this Section only to the extent necessary to satisfy the
average contribution percentage test, and only to the extent that the Plan
continues to satisfy the average deferral percentage test set forth in
Section 6.3 without taking into account such Basic and Supplemental
Contributions.
(c) For purposes of this Section, the contribution percentage of
a Highly Compensated Employee who is an Eligible Employee under this Plan
and who has made employee after-tax contributions or for whom employer
matching contributions were made under any other plan of the Company or an
Affiliated Company shall be the sum of his contribution percentages under
all such plans (excluding those that are not permitted to be aggregated
with the Plan under Treas. Reg. (S)1.401(m)-1(b)(3)(ii)) for the Plan Year.
(d) For purposes of determining contribution percentages, the
Employer or the Committee may take Basic and Supplemental Contributions
into account, in accordance with Treasury regulations, so long as the
requirements of Section 6.03 are met both when the Basic and Supplemental
Contributions used in determining contribution percentages are and are not
included
-37-
<PAGE>
in determining actual deferral percentages. In addition, this Plan shall be
aggregated and treated as a single plan with other plans maintained by the
Company or an Affiliated Company to the extent that this Plan is aggregated
with any such other plan for purposes of satisfying Section 410(b) (other
than section 410(b)(2)(A)(ii)) of the Code.
6.6 Limitation on Use of Percentage Tests. For any Plan Year,
-------------------------------------
the sum of the average deferral percentage and the average contribution
percentage for all Highly Compensated Employees who are Eligible Employees
shall not exceed the greater of (a) and (b) where:
(a) is the sum of (i) 1.25 times the greater of the relevant
actual deferral percentage or the relevant actual contribution percentage
and (ii) two percentage points plus the lesser of the relevant actual
deferral percentage or the relevant actual contribution percentage. In no
event, however, shall this amount exceed twice the lesser of the relevant
actual deferral percentage or the relevant actual contribution percentage;
and
(b) is the sum of (i) 1.25 times the lesser of the relevant
actual deferral percentage or the relevant actual contribution percentage
and (ii) two percentage points plus the greater of the relevant actual
deferral percentage or the relevant actual contribution percentage. In no
event, however, shall this amount exceed twice the greater of the relevant
actual deferral percentage or the relevant actual contribution percentage.
-38-
<PAGE>
For purposes of this Section, the term "relevant actual deferral
percentage" means the actual deferral percentage of the group of Non-Highly
Compensated Employees who are Eligible Employees and the term "relevant
actual contribution percentage" means the actual contribution percentage of
the group of Non-Highly Compensated Employees who are Eligible Employees.
If the limitation in this Section is not met, the actual deferral
percentage or the actual contribution percentage of Highly Compensated
Employees, as determined by the Committee, shall be reduced in the manner
prescribed in Section 6.8 until the limitation is met; provided, however,
that in Plan Years beginning after 1991, the actual contribution percentage
shall be reduced to satisfy this limit.
For purposes of this Section, this Plan shall be aggregated and
treated as a single plan with other plans maintained by the Company or an
Affiliated Company to the extent that this Plan is aggregated with any such
other plan for purposes of satisfying Section 410(b) (other than section
410(b)(2)(A)(ii)) of the Code.
6.7 Treatment of Family Members. For purposes of Section 6.3
---------------------------
and 6.5, if a Highly Compensated Employee is subject to the family
aggregation rules of Section 414(q)(6) of the Code because he is either a
5% owner (as defined in Section 416(i) of the Code and regulations issued
thereunder), or is one of the top 100 Highly Compensated Employees (based
on 415 Compensation received including Basic and Supplemental Contributions
-39-
<PAGE>
hereunder) during the Plan Year of reference, the combined actual deferral
(or contribution) ratio for the family group (which shall be treated as one
Highly Compensated Employee) shall be the actual deferral (or contribution)
ratio determined by combining the applicable contributions and Compensation
of all of the eligible family members. Any family member(s) included above
shall not be considered a separate Participant in determining the average
deferral percentage or average contribution percentage hereunder. For
purposes of this paragraph, "family member" means, with respect to an
Employee, such Employee's spouse and lineal ascendants and descendants and
the spouses of such lineal ascendants and descendants.
6.8 Return of Excess Contributions.
------------------------------
(a) If the average deferral percentage or the average
contribution percentage for all Participants who are Highly Compensated
Employees exceeds the amount specified in Sections 6.3 or 6.5 for any Plan
Year, the Basic and Supplemental Contributions (and corresponding Employer
Contributions) for the Highly Compensated Employee(s) with the highest
deferral (or contribution) percentage shall be reduced so that his
applicable percentage is reduced to the greater of (1) such percentage that
enables the Plan to satisfy the applicable percentage test, or (2) a
percentage equal to the applicable percentage of the Highly Compensated
Employee(s) with the next highest percentage. This procedure shall be
repeated until the applicable percentage test is satisfied. For purposes
of determining the necessary
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<PAGE>
reduction, Basic and Supplemental Contributions previously distributed
pursuant to Section 4.8 shall be treated as distributed under this Section
6.8(a).
(b) The average deferral percentage of any Highly Compensated
Employee which must be reduced pursuant to paragraph (a) shall be reduced
(1) first, by distributing Supplemental Contributions and (2) then, by
distributing Basic Contributions to the Employee; and the provisions of
Section 4.8(b) regarding the forfeiture of related Employer Contributions
or Supplemental Employer Contributions shall apply.
(c) The average contribution percentage of any Highly Compensated
Employee which must be reduced pursuant to paragraph (a) shall be reduced
by distributing the excess Employer and Supplemental Employer Contributions
to the Employee.
(d) Any distribution or forfeiture of Basic or Supplemental
Contributions or Matching Contributions necessary pursuant to subsections
(a), (b) or (c) shall include a distribution or forfeiture of the income,
if any, allocable to such contributions. Such income shall be equal to the
sum of the allocable gain or loss for the Plan Year and shall be determined
by the Committee in a manner uniformly applicable to all Participants and
consistent with Treasury regulations.
(e) Distribution under paragraphs (b) and (c) shall be made
within two and one half (2 1/2) months following the close of such Plan
Year, if administratively practicable, but in no event later than the last
day of the Plan Year following
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<PAGE>
such Plan Year.
(f) For purposes of satisfying the nondiscrimination test
described in Section 6.6, the Matching Contributions of all Highly
Compensated Employees shall be reduced as described in subsection (c).
6.9 Maximum Allocation to Participants.
----------------------------------
(a) Notwithstanding any other provision of this Plan, the amount
of the Annual Addition to each Participant's Accounts for any Plan Year may
not exceed the lesser of:
(1) $30,000 (or, effective January 1, 1987, if greater, 25%
of the dollar limitation in effect under Section 415(b)(1)(A) of the Code),
or
(2) 25% of the total 415 Compensation paid to the
Participant during a Plan Year.
The limitation referred to in paragraph (2) shall not apply to any
contribution for medical benefits within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code which is otherwise treated as an Annual
Addition under Section 415(l)(1) or 419A(d)(2) of the Code.
(b) For purposes of this Section, "Annual Addition" means the sum
of all contributions including, effective January 1, 1987, all after-tax
contributions, by the Participant or by the Employer or an Affiliated
Company hereunder or under any defined contribution plan maintained by
either, all forfeitures allocated to the Participant's accounts under such
plans, and amounts treated as part of an Annual Addition under
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<PAGE>
Sections 415(l) and 419A(d)(2) of the Code.
(c) If the amount otherwise allocable to the Accounts of a
Participant would exceed the amount described above as a result of the
reallocation of forfeitures, a reasonable error in estimating the
Participant's Compensation, a reasonable error in determining the amount of
elective deferrals (within the meaning of Section 402(g) of the Code) that
may be made under the limitations of Section 415 of the Code, or such other
circumstances as permitted by law, the Committee shall determine which
portion, if any, of such excess amount is attributable to the Participant's
Basic and Supplemental Contributions, and/or Matching Contributions and/or
Supplemental Employer Contributions, if any, until such amount has been
exhausted. To the extent any portion of a Participant's Basic or
Supplemental Contributions are determined to be excess under this Section,
such Basic or Supplemental Contributions, with income thereon, shall be
returned to the Participant as soon as administratively practicable. To the
extent any portion of the Matching Contributions, or Supplemental Employer
Contributions allocable to a Participant are determined to be excess under
this Section, while the Participant remains an Eligible Employee, his
excess Matching Contributions and/or Supplemental Employer Contributions
shall be held in a suspense account (which shall share in investment gains
and losses of the Fund) by the Trustee until the following Plan Year (or
any succeeding Plan Years), at which time such amounts shall be allocated
to the Participant's Accounts
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<PAGE>
before any Matching Contributions or Supplemental Employer Contributions
are made on his behalf for the Plan Year. When the Participant ceases to be
an Eligible Employee, his excess Matching Contributions and/or Supplemental
Employer Contributions held in the suspense account shall be allocated in
the following Plan Year (or any succeeding Plan Years) to the Accounts of
other Participants in the Plan. Furthermore, the Committee shall perform
any other actions as may be necessary to preserve the Plan's status as a
qualified plan.
6.10 Maximum Allocation Under all Plans. If a Participant is
----------------------------------
also earning retirement benefits under a separate defined benefit plan or
plans established by the Company or an Affiliated Company, the benefits
under such plan or plans shall be so limited that the sum of (a) and (b)
below shall not exceed 1.0, where:
(a) is a fraction, the numerator of which is the projected annual
benefit of the Participant under the defined benefit plan(s) and the
denominator of which is the lesser of:
(1) the product of 1.25 and $90,000 (subject to all
adjustments as are permitted by, or required under Section 415 of the
Code), or
(2) the product of 1.4 and 100% of the Participant's average
annual 415 Compensation for his high three consecutive years; and
(b) is a fraction, the numerator of which is the sum of all
Annual Additions for all Plan Years during which he
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<PAGE>
was a Participant and the denominator of which is the sum, for all Plan
Years during which the Participant was an Employee of the Employer of the
lesser of:
(1) the product of 1.25 and the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for such Plan Year, or
(2) the product of 1.4 and 25% of the Participant's 415
Compensation for such Plan Year.
6.11 Accounts. All contributions and earnings thereon may be
--------
invested in one commingled fund for the benefit of all Participants. In
order that the interest of each Participant may be accurately determined
and computed, however, separate Accounts shall be maintained for each
Participant which shall represent his interest in the Fund.
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<PAGE>
ARTICLE VII
-----------
DISTRIBUTION
------------
7.1 General. The interest of each Participant in the Fund shall
-------
be distributed in the manner, in the amount and at the time provided in
this Article, except that in the event of termination of the Plan, the
provisions of Section 13.2 shall govern.
7.2 Retirement. Subject to Section 7.10, upon a Participant's
----------
Retirement, the value of his Accounts in the Fund, computed in accordance
with Section 7.7 shall be paid to him as soon as administratively
practicable following the date of his Retirement in a single payment.
Effective October 1, 1992, in lieu of receiving a single payment, a
Participant may elect to draw upon his Accounts pursuant to a continuous
withdrawal right which shall be subject to such reasonable terms and
conditions (such as minimum amounts and frequency of withdrawals) as may be
established by the Committee, in its sole discretion. If the Board of
Directors determines to make a Supplemental Employer Contribution for the
Plan Year during which a Participant's Retirement occurs, such
Participant's pro rata share thereof shall be paid to him (or made
available to him) as soon as practicable after the Supplemental Employer
Contribution has been made unless the Participant has elected to defer
distribution pursuant to Section 7.10.
7.3 Death. In the event of a Participant's death, the
-----
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<PAGE>
value of his Accounts in the Fund, computed in accordance with Section
7.7, shall be paid in a single distribution as soon as practicable
following the date of his death in accordance with Section 7.4. If the
Board of Directors determines to make a Supplemental Employer Contribution
for the Plan Year during which a Participant dies, such Participant's pro
rata share thereof shall be paid to the Participant's designated
beneficiary as soon as practicable after the Supplemental Employer
Contribution has been made.
7.4 Beneficiary Designation.
-----------------------
(a) Death benefits under the Plan shall be paid to the
Participant's surviving Spouse (i) unless (A) the Spouse consents in
writing not to receive such benefit, (B) such consent acknowledges its own
effect and (C) such consent is witnessed by a notary public; or (ii) unless
the Participant establishes to the satisfaction of a Plan representative
either that he has no Spouse or that his Spouse cannot be located.
(b) Except as provided in this Section, each Participant shall
have the unrestricted right at any time to designate the beneficiary or
beneficiaries who shall receive, on or after his death, his interest in the
Fund. Such designation shall be made by executing and filing with the
Committee a written instrument in such form as may be prescribed by the
Committee for that purpose. Except as provided in this Section, the
Participant shall also have the unrestricted right to revoke and to change,
at any time and from time to time, any beneficiary
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<PAGE>
designations previously made; provided, however, that the Spouse of the
Participant must consent to any such revocation or change. Such revocations
and/or changes shall be made by executing and filing with the Committee a
written instrument in such form as may be prescribed by the Committee for
that purpose. No designation, revocation, or change of beneficiaries shall
be valid and effective unless and until filed with the Committee. If no
designation is made, or if the beneficiaries named in such designation
predecease the Participant, or if the beneficiaries cannot be located by
the Committee, the interest of the deceased Participant shall be paid to
the Participant's surviving Spouse or, if none, to the Participant's
estate.
7.5 Disability. Subject to Section 7.10, in the event that a
----------
Participant suffers a Permanent and Total Disability, the value of his
Accounts, computed in accordance with Section 7.7, shall be paid to him or
applied for his benefit in a single payment as soon as practicable
following the date on which the Committee determines that he has a
Permanent and Total Disability. Effective October 1, 1992, in lieu of
receiving a single payment, a Participant may elect to draw upon his
Accounts pursuant to a continuous withdrawal right which shall be subject
to such reasonable terms and conditions (such as minimum amounts and
frequency of withdrawals) as may be established by the Committee, in its
sole discretion. If the Company makes a Supplemental Employer Contribution
for the Plan Year during which the Permanent and Total Disability occurs,
such Participant's pro
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<PAGE>
rata share thereof shall be paid to him (or made available to him) as soon
as practicable after the Supplemental Employer Contribution has been made
unless such Participant has elected to defer distribution pursuant to
Section 7.10.
Permanent and Total Disability shall be determined by the
Committee, who may consult with a medical examiner and who
may require a Participant to undergo physical or other examinations
reasonably necessary to form the basis of the Committee's determination.
7.6 Treatment of Terminated Participant.
-----------------------------------
(a) In the case of a Participant whose employment with the
Employer and all Affiliated Companies has terminated (other than by
Retirement, death, or Permanent and Total Disability) and whose vested
Account balances do not exceed $3,500 (and has never exceeded $3,500 at the
time of any prior distribution), the benefit of such Participant,
calculated in accordance with Section 7.7, shall be paid to or applied for
the benefit of such Participant in a single sum as soon as practicable.
(b) Subject to Section 7.10, in the case of a Participant whose
employment with the Employer and all Affiliated Companies has terminated
(other than by Retirement, death, or Permanent and Total Disability) and
whose vested Account balances exceed $3,500 (or have ever exceeded $3,500
at the time of any prior distribution), the benefit of such Participant,
calculated in accordance with Section 7.7, shall be paid to or applied for
-49-
<PAGE>
the benefit of such Participant at the earliest date provided under this
Article VII as if the Participant had continued employment. The Committee
shall, however, make a single sum distribution to the Participant or,
effective October 1, 1992, shall make available to the Participant a
continuous withdrawal right, earlier than the date referenced in the
preceding sentence if the Participant elects in writing to receive an
earlier distribution and his Spouse consents to the election.
7.7 Valuation for Distribution. For the purposes of paying the
--------------------------
amounts to be distributed to a Participant or his beneficiaries under the
provisions of this Article, the value of the Fund and the amount of the
Participant's Accounts shall be determined in accordance with the
provisions of this Section as of the Valuation Date coincident with or next
following the date on which occurs the event which gives rise to payment
under this Article (or the date of the Participant's consent pursuant to
Section 7.10, if later). The Trustee may establish accounting procedures
for the purpose of making the allocations, valuations, and adjustments
necessary to maintain the Participant's Accounts in the Fund. From time to
time, the Trustee may modify its accounting procedures for the purpose of
achieving equitable and nondiscriminatory allocation among the Accounts of
Participants in accordance with the general concepts of the Plan and the
provisions of this Article. All valuations of the Fund shall be performed
on the basis of the fair market value of each of the assets therein.
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<PAGE>
7.8 Timing of Distribution.
----------------------
(a) Unless the Participant elects otherwise, a Participant
entitled under this Article to receive benefits shall commence to receive
benefits no later than the earlier of the dates determined under (1) and
(2) below:
(1) the later of (A) the 60th day after the close of the
Plan Year in which the Participant attains age 65 or (B) the 60th day after
the close of the Plan Year in which the Participant's employment with the
Employer and all Affiliated Companies terminates; or
(2) the Participant's Required Distribution Date.
(b) A Participant who is an Employee on his Required Distribution
Date, instead of receiving payment in a single sum, may elect to receive
distribution of his Accounts while he remains an Employee in annual
installments, commencing not later than his Required Distribution Date,
over a period certain not extending beyond the life expectancy of the
Participant, with no recalculation of life expectancy. Each such annual
installment shall equal the minimum amount required to be distributed
pursuant to Section 401(a)(9) of the Code and regulations thereunder based
on the applicable life expectancy. Notwithstanding the Participant's
election to receive distribution as described above, the amounts remaining
in the Participant's Accounts upon his actual termination of employment
with the Employer and all Affiliated Companies will be
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<PAGE>
distributed to him in a single sum on the earliest practicable date
following such termination, but not later than the 60th day following the
close of the Plan Year in which such termination occurs.
(c) Notwithstanding anything in this Plan to the contrary, a
Qualified Domestic Relations Order may provide that any benefits of a
Participant payable to an Alternate Payee shall be distributed immediately
or at any other time specified in the Qualified Domestic Relations Order,
but not later than the latest date benefits would be payable to the
Participant under this Article. If the Qualified Domestic Relations Order
does not specify the time at which benefits shall be payable to the
Alternate Payee, the Alternate Payee may elect, in writing on a form
prescribed by the Committee, to have benefits commence (A) in accordance
with Section 7.6, as of the earlier of (i) the Participant's 50th birthday
or (ii) the Participant's termination of employment, or as of any date
thereafter that is not later than the latest date on which benefits would
be payable to the Participant pursuant to Section 7.6 or (B) in accordance
with Section 7.3, but as of the Alternate Payee's death; provided, however,
that in the event the amount payable to the Alternate Payee under the
Qualified Domestic Relations Order does not exceed $3,500, such amount
shall be paid to the Alternate Payee in a single sum as soon as practicable
following the Committee's receipt of the order and verification of its
status as a Qualified Domestic Relations Order.
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<PAGE>
7.9 Mode of Distribution. Distributions under this Article
--------------------
shall be made as follows:
(a) the portion of a Participant's Accounts that is not invested
in the Common Stock Fund shall be paid in cash; and
(b) the portion of a Participant's Accounts that is invested in
the Common Stock Fund shall be paid in whole shares of Common Stock unless
the Participant elects to have the portion of his Accounts invested in the
Common Stock Fund converted to and distributed in cash. If the Participant
makes an election to receive cash in lieu of Common Stock, his distribution
shall be reduced by any expense incurred (including brokerage fees and
commissions) in converting the portion of his Accounts invested in the
Common Stock Fund to cash.
7.10 Consent to Distribution. Notwithstanding anything in the
-----------------------
Plan to the contrary, in the case of a Participant whose interest in his
Accounts exceeds $3,500 (or has ever exceeded $3,500 at the time of any
prior distribution), no distribution shall be made pursuant to Section 7.2,
7.5 or 7.6 prior to the Participant's attainment of age 65 (his Required
Distribution Date effective October 1, 1992) without the written consent of
the Participant. If the Participant does not so consent, then distribution
will be deferred until any subsequent date elected by the Participant in
writing pursuant to such procedures as the Committee may impose, but not
later than the
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<PAGE>
Participant's 65th birthday (his Required Distribution Date
effective October 1, 1992). A Participant's election to receive
payment prior to the date he attains age 65 (his Required Distribution Date
effective October 1, 1992) must be made within the 90-day period ending on
the benefit payment date elected by the Participant and in no event earlier
than the date the Committee provides the Participant with notice of his
right to defer payment until age 65 (his Required Distribution Date
effective October 1, 1992) and the modes of payment available. Such notice
must be supplied not less than 30 days nor more than 90 days prior to the
benefit payment date. Notwithstanding the preceding sentence, effective
January 1, 1993, if Sections 401(a)(11) and 417 of the Code do not apply to
the distribution, the distribution shall commence less than 30 days after
receipt of the notice described herein, provided that the Participant has
been notified that he has a right to a period of at least 30 days to elect
a distribution and the Participant, after receiving such notice,
affirmatively elects a distribution.
7.11 Direct Transfers.
----------------
(a) Effective January 1, 1993, in the event any payment or
payments to be made under the Plan to a Participant, a beneficiary who is
the surviving spouse of a Participant, or an alternate payee under a
Qualified Domestic Relations Order who is the spouse or former spouse of a
Participant would constitute an "eligible rollover distribution," such
individual may request that such payment or payments be transferred
directly from the
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<PAGE>
Trust Fund to the trustee of (i) an individual retirement account described
in Section 408(a) of the Code, (ii) an individual retirement annuity
described in Section 408(b) of the Code (other than an endowment contract),
(iii) an annuity plan described in Section 403(a) of the Code, or (iv) a
qualified retirement plan the terms of which permit the acceptance of
rollover distributions; provided, however, that clauses (iii) and (iv)
shall not apply with respect to an eligible rollover distribution made to a
beneficiary who is the surviving spouse of a Participant or an alternate
payee under a Qualified Domestic Relations Order who is the former spouse
of a Participant. Any such request shall be made in writing, on the form
prescribed by the Committee for such purpose, at such time in advance as
the Committee may specify.
(b) For purposes of this Section 7.11, eligible rollover
distribution shall mean a distribution from the Plan, excluding (i) any
distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) over the life (or life
expectancy) of the individual, the joint lives (or joint life expectancies)
of the individual and the individual's designated beneficiary, or a
specified period of ten (10) or more years, (ii) any distribution to the
extent such distribution is required under Section 401(a)(9) of the Code,
and (iii) any distribution to the extent such distribution is not included
in gross income.
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ARTICLE VIII
------------
VESTING AND CREDITED SERVICE
----------------------------
8.1 Accounts. Each Participant shall be fully vested at all
--------
times in all of his Accounts under the Plan.
8.2 Breaks in Service.
-----------------
(a) The performance of no Hours of Service during any Plan Year
shall constitute a 1-year break in credited service; provided that,
notwithstanding the foregoing, if an Employee is absent for one of the
following reasons, he shall be credited with one Hour of Service, for
purposes of this Section only, for each Hour of Service he would have
received if he had continued in the active employ of an Employer during the
period of absence:
(1) layoff for a period of less than six (6) months;
provided that the Employee returns to work promptly upon receipt of notice
to do so;
(2) leave of absence granted in accordance with established
leave of absence policies;
(3) military service such that his right to reemployment is
protected by law; provided the Employee makes application for
reemployment within the time provided by law; and
(4) illness or accident for a period of less than twelve
(12) months; provided, the employee returns to work as soon as he is
physically able.
(b) If an Employee is absent from work by reason
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<PAGE>
of pregnancy, childbirth, or adoption, or for purposes of the care of such
Employee's child immediately after birth or adoption, such Employee shall
be credited, solely for purposes of this Section, with sufficient Hours of
Service to avoid a Break in Service in the Plan Year in which the absence
commences, or, if the Employee already has more than one Hour of Service in
such Plan Year, in the Plan Year immediately following. Hours of Service
during such absence shall be credited in an amount equal to the Hours of
Service the Employee would have had but for such absence, or, if such hours
cannot be determined, at the rate of eight hours per normal workday.
8.3 Special Vesting Provision for Participants Whose
------------------------------------------------
Participation is Terminated as a Result of the January 23, 1986 Stock Sale.
--------------------------------------------------------------------------
Any Participant employed by one of the following Employers whose
participation in the Plan is terminated on February 28, 1986 as a result of
the sale of the Employer's stock to CooperVision, Inc. under a stock
purchase agreement between CooperVision, Inc. and the Company, dated
January 23, 1986, shall become fully vested in his Employer Contribution
and Employer Valuation Accounts on February 28, 1986:
Richards Medical Company
Richards Surgical Manufacturing Company
Comfort Care Products, Inc.
Neomed, Inc.
Dyonics, Inc.
Cilco, Inc.
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ARTICLE IX
----------
WITHDRAWALS AND LOANS
---------------------
9.1 General. The interest of each Participant in the Fund may
-------
be withdrawn in the manner, in the amount and at the time provided in this
Article. All withdrawals must be made on written notice in accordance with
the procedures established by the Committee. A withdrawal of less than the
full value of an Account may be made only in multiples of $100, except as
provided under Section 9.5.
9.2 Special Withdrawals. With the approval of the Committee, a
-------------------
Participant may withdraw, without penalty, up to the total value of his
Accounts upon:
(a) termination of the Plan without establishment of a successor
plan; or
(b) the sale by an Employer of substantially all of its assets
used in a trade or business or of its interest in a subsidiary if the
Participant making the withdrawal begins employment with the corporation
acquiring such assets (the "Purchaser") and if the Purchaser does not
maintain the Plan after the disposition.
Unless otherwise determined by the Committee, any withdrawal
pursuant to Section 9.2(b) must be made before the end of the second Plan
Year following the Plan Year in which the disposition occurred.
9.3 Withdrawals from Basic Contribution Account I and
-------------------------------------------------
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<PAGE>
Supplemental Contribution Account I. A Participant may withdraw from his
-----------------------------------
Basic Contribution Account I and Supplemental Contribution Account I all or
any portion of such Accounts.
9.4 Withdrawals from Employee Valuation Account and Rollover
--------------------------------------------------------
Account. A Participant may withdraw, as of any date, all or any portion of
-------
his Employee Valuation Account and/or his Rollover Account.
9.5 Withdrawals From Basic Contribution Account II and
--------------------------------------------------
Supplemental Contribution Account II.
------------------------------------
(a) A Participant may withdraw amounts (other than earnings
attributable to Plan Years beginning after December 31, 1988) from his
Basic Contribution Account II and his Supplemental Contribution Account II
by submitting a written request to the Committee, which request shall
represent that the withdrawal is made for one or more of the following
purposes:
(1) purchase (excluding mortgage payments) of a principal
residence for the Participant;
(2) post-secondary educational tuition expenses and related
educational fees for the next (12) months for the Participant, his Spouse,
his children or his dependents;
(3) medical expenses for medical care described in Section
213(d) of the Code of a Participant, his Spouse, his children or his
dependents (or amounts necessary to obtain such medical care); or
(4) the need to prevent the eviction of the Participant
from his principal residence or foreclosure on the
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<PAGE>
mortgage of the Participant's principal resident; or
(5) such other circumstances as may be prescribed by the
Secretary of the Treasury or his delegate.
(b) Such a withdrawal shall be permitted only if the Committee
finds that it is necessary in light of immediate and heavy financial needs
of the Participant. The amount of the withdrawal may not exceed the amount
required to meet the financial need created by the hardship (including, if
elected by the Participant, any amount necessary to pay any federal, state
or local income taxes or penalties reasonably anticipated to result from
the distribution) and not reasonably available from other resources of the
Participant. A Participant's resources shall include those assets of his
Spouse and minor children that are reasonably available to the Participant.
A Participant must certify, on a form provided by the Committee, that his
financial need cannot be relieved:
(1) through reimbursement or compensation by insurance or
otherwise;
(2) by reasonable liquidation of the Participant's assets
to the extent such liquidation would not itself cause an immediate and
heavy financial need;
(3) by cessation of contributions to the Plan; or
(4) by other distributions from the Plan, by other
distributions or loans from plans maintained by any employer or by
borrowing from commercial sources on reasonable
-60-
<PAGE>
commercial terms.
There shall be no limitation on the frequency of permitted withdrawals
under this Section.
(c) Notwithstanding the provisions of Subsections (a) and (b),
upon his attainment of age 59-1/2, a Participant shall be entitled to
withdraw all or any portion of his Basic Contribution Account II and
Supplemental Contribution Account II.
9.6 Withdrawal from Employer Contribution, Supplemental Employer
------------------------------------------------------------
Contribution, PAYSOP and Employer Valuation Accounts. A Participant may
----------------------------------------------------
withdraw from his Employer Contribution Account, Supplemental Employer
Contribution Account, PAYSOP Account and his Employer Valuation Account all
or any portion of such Accounts which are not invested in the Common Stock
Fund and which have been held in such Accounts for at least two (2) full
years. A Participant who has completed at least sixty (60) months of
participation in the Plan may also withdraw that portion of the Accounts
which is not invested in the Common Stock Fund and which has been held in
such Accounts for less than two (2) full years.
9.7 Fund to be Charged with Withdrawal. A withdrawal from a
----------------------------------
Participant's Account under this Article will be made first out of the
Participant's interest in the various Investment Media in which the Account
is invested, other than the Participant's interest invested in the Common
Stock Fund, in proportion to the Participant's share in such Investment
Media, and then out of the Participant's interest in the Common Stock
-61-
<PAGE>
Fund, where permitted.
9.8 Withdrawals Not Subject to Replacement. A Participant may
--------------------------------------
not replace any portion of his Accounts withdrawn under this Plan.
9.9 Payment of Withdrawals. Withdrawals under this Article
----------------------
shall be paid in cash.
9.10 Valuation for Distribution. For the purposes of paying the
--------------------------
amounts to be distributed to a Participant or to his beneficiaries under
the provisions of this Article, the value of the Fund and the amount of the
Participant's interest therein shall be determined in accordance with the
provisions of Article VII as of the date of the withdrawal.
9.11 Loans. Each Participant who is an Employee of an Employer
-----
and any other Participant or beneficiary who is a party in interest as
defined in ERISA may apply for a loan from the Plan. The Committee shall
have the right to require any applicant for a loan to secure the written
consent of any party for whose benefit there exists a Qualified Domestic
Relations Order in respect to the Participant's interest under the Plan.
Requests for loans may not be made more frequently than once in any twelve-
month period. Loans shall be at least $1,000 in amount and in no event
shall the total loans exceed the lesser of (i) 50% of the vested balance
credited to his Accounts (including his interest in the Common Stock Fund)
or (ii) $50,000, as such amount is reduced by the excess, if any, of (A)
the highest outstanding balance of all loans during the twelve months prior
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<PAGE>
to the time the new loan is to be made over (B) the outstanding balance of
loans made to the Participant on the date such new loan is made. Loans
under any other qualified plan sponsored by the Employer and all Affiliated
Companies shall be aggregated with loans under the Plan in determining
whether or not the limitation stated herein has been exceeded. Applications
for a loan must be submitted in writing, in the manner prescribed by the
Committee. All loans shall be subject to the final approval of the
Committee, in its sole discretion, which discretion shall be exercised as
to all Participants on a reasonably equivalent basis. All loans shall be
made upon such terms and conditions as the Committee shall determine, which
shall include provisions for repayment and adequate security, and shall
bear interest on the unpaid principal at a reasonable rate to be determined
by the Committee in accordance with generally prevailing market conditions
for similar types of loans. Unless otherwise specified, no loan shall have
a term in excess of five years (or, in the case of a loan used to acquire
the Participant's principal residence, a term in excess of ten years), and
the loan shall be repaid on a schedule providing for level amortization
determined by the Committee. Each loan shall be considered a separate
Investment Medium (to which the interest payable on the loan shall be
allocated), and the Participant shall specify from which Investment Medium
or Media the Participant's interest is to be liquidated to provide the loan
principal; provided, however, that a Participant's interest in the Common
Stock Fund shall not be
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<PAGE>
liquidated to provide the loan principal. If any loan to a Participant is
unpaid on the date that he or his beneficiary becomes entitled to any
distribution from the Fund, such loan, in all events and notwithstanding
the terms thereof, shall become immediately due and payable on such date,
and the amount thereof, together with any accrued unpaid interest thereon,
shall be deducted from the amount of any distribution to which the
Participant or his beneficiary may become entitled. Effective October 1,
1992, the deduction described in the preceding sentence shall not be made
if the Participant or his beneficiary makes arrangements with the Committee
to continue to repay the loan while the Participant's or beneficiary's
interest remains in the Plan; provided, however, that the Plan's right to
make such deduction shall be exercised immediately upon the Participant's
or beneficiary's (i) request to receive payment of his interest hereunder
which would reduce the interest below the outstanding loan balance or (ii)
failure to make any scheduled loan payment when due. The conditions and
terms of all loans shall be applied in a uniform and consistent manner with
respect to all Participants. A loan may be prepaid at any time without
penalty.
9.12 Written Instructions. All loans or withdrawal payments to
--------------------
a Participant under the Plan shall be made by the Trustee from the
appropriate Account of the Participant only upon receipt of written
instructions furnished by the Committee setting forth the amount of the
loan or withdrawal payment and the name and address of the recipient. In
making any loan or
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<PAGE>
withdrawal payment under the Plan, the Trustee shall be fully entitled to
rely on the instructions furnished by the Committee and shall be under no
duty to make any inquiry or investigation with respect thereto.
9.13. Spousal Consent. No withdrawal or loan request shall be
---------------
granted unless the Spouse of the Participant consents to the withdrawal or
loan within the 90-day period prior to the date the withdrawal or loan is
made. The consent shall be in writing on a form provided by the Committee,
shall acknowledge the effect of the withdrawal or loan on the Participant's
benefit under the Plan, shall be witnessed by a notary public, and shall be
irrevocable. Spousal consent may be waived if it is established to the
satisfaction of the Committee that the consent may not be obtained because
there is no Spouse, because the Spouse cannot be located, or because of
other circumstances as may be prescribed by the Committee.
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<PAGE>
ARTICLE X
---------
ADMINISTRATION
--------------
10.1 Committee. The Committee shall be the named fiduciary
---------
which shall control and manage the operation of and administer the Plan.
The Committee members may, but need not be, employees of an Employer. They
shall be entitled to reimbursement of expenses, but those members of the
Committee who are also employees of an Employer shall be entitled to no
compensation for their service on the Committee. Such Committee shall be
responsible for the general administration of the Plan under the policy
guidance of the Company.
10.2 Duties and Powers of Committee. In addition to the duties
------------------------------
and powers described elsewhere hereunder, the Committee shall have the
following specific duties and powers:
(a) to retain such consultants, accountants, attorneys and other
advisors as deemed necessary or desirable, to render statements, reports,
and advice with respect to the Plan and to assist the Committee in
complying with all applicable rules and regulations affecting the Plan; any
consultants, accountants or attorneys may be the same as those retained by
an Employer;
(b) to review the investment performance of the Fund, to create
additional or substitute Investment Media, and to establish a funding
policy consistent with the objectives of the Plan;
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<PAGE>
(c) to enact uniform and non-discriminatory rules and regulations
necessary to carry out the provisions of the Plan;
(d) to resolve questions or disputes relating to eligibility for
benefits or the amount of benefits under the Plan;
(e) to interpret the provisions of the Plan;
(f) to determine whether any domestic relations order received by
the Plan is a Qualified Domestic Relations Order;
(g) to evaluate administrative procedures; and
(h) to delegate such duties and powers as the Committee shall
determine from time to time to any person or persons.
10.3 Functioning of Committee. The Committee and those persons
------------------------
and entities to whom the Committee has delegated responsibilities shall
keep accurate records and minutes of meetings, interpretations and
decisions. The Committee shall act by majority vote of the members, and
such action shall be evidenced by a written document.
10.4 Construction of the Plan. The Committee shall take such
------------------------
steps as are considered necessary and appropriate to remedy any inequity
that results from incorrect information received or communicated in good
faith or as the consequence of an administrative error. The Committee
shall have the full discretionary power and authority to make factual
determinations,
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<PAGE>
to interpret the Plan, to make benefit eligibility determinations and to
determine all questions arising in the administration, interpretation and
application of the Plan. The Committee shall correct any defect, reconcile
any inconsistency or ambiguity, or supply any omission with respect to the
Plan. All such corrections, reconciliations, interpretations and
completions of Plan provisions shall be final, binding and conclusive upon
all parties, including, without limitation, the Company, each Employer, the
Employees, their families, dependents and any Alternative Payees.
10.5 Disputes.
--------
(a) In the event that the Committee denies, in whole or in part,
a claim for benefits by a Participant or his beneficiary, the Committee
shall furnish notice of the denial to the claimant, setting forth:
(1) the specific reasons for the denial;
(2) specific reference to the pertinent Plan provisions on
which the denial is based;
(3) a description of any additional information necessary
for the claimant to perfect the claim and an explanation of why such
information is necessary; and
(4) appropriate information as to the steps to be taken if
the claimant wishes to submit his claim for review.
Such notice shall be forwarded to the claimant within ninety (90)
days of the Committee's receipt of the claim;
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<PAGE>
provided, however, that in special circumstances the Committee may extend
the response period for up to an additional ninety (90) days, provided that
the Committee so notifies the claimant in writing and specifies the reason
or reasons for such extensions.
(b) Within sixty (60) days of receipt of a notice of claim
denial, a claimant or his duly authorized representative may petition the
Committee in writing for a full and fair review of the denial. The claimant
or his duly authorized representative shall have the opportunity to review
pertinent documents and to submit issues and comments in writing to the
Committee. The Committee shall review the denial and communicate its
decision and the reasons therefor to the claimant in writing within sixty
(60) days of receipt of the petition; provided, however, that the Committee
may extend the response period in special circumstances for up to an
additional sixty (60) days. Written notice of the extension shall be sent
to the claimant prior to the commencement of the extension.
10.6 Indemnification. Each member of the Committee and any
---------------
other person who is an employee or director of an Employer or an Affiliated
Company shall be indemnified by the Company against expenses (other than
amounts paid in settlement to which the Company does not consent)
reasonably incurred by him in connection with any action to which he may be
a party by reason of his performance of administrative functions and duties
under the Plan, except in relation to matters as to which he
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<PAGE>
shall be adjudged in such action to be personally guilty of negligence or
willful misconduct in the performance of his duties. The foregoing right to
indemnification shall be in addition to such other rights as the Committee
member or other person may enjoy as a matter of law or by reason of
insurance coverage of any kind. Rights granted hereunder shall be in
addition to and not in lieu of any rights to indemnification to which the
Committee member or other person may be entitled pursuant to the by-laws of
the Employer and Affiliated Company.
10.7 Reliance on Data and Consents. The Employer, the Trustee,
-----------------------------
the Committee, all fiduciaries with respect to the Plan, and all other
persons or entities associated with the operation of the Plan, the
management of its assets, and the provision of benefits thereunder, may
reasonably rely on the truth, accuracy and completeness of any data
provided by any Participant, Spouse, or beneficiary, including, without
limitation, representations as to age, health and marital status.
Furthermore, the Employer, the Trustee, the Committee, and all fiduciaries
with respect to the Plan may reasonably rely on all consents, elections and
designations filed with the Plan or those associated with the operation of
the Plan and the Fund by any Participant, the Spouse of any Participant,
any beneficiary of any Participant, any Alternate Payee, or the
representatives of such persons without duty to inquire into the
genuineness of any such consent, election or designation. None of the
aforementioned persons or entities associated with the operation
-70-
<PAGE>
of the Plan, its assets and the benefits provided under the Plan shall have
any duty to inquire into any such data, and all may rely on such data being
current to the date of reference, it being the duty of the Participants,
spouses of Participants, Beneficiaries, and Alternate Payees to advise the
appropriate parties of any change in such data.
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<PAGE>
ARTICLE XI
----------
THE FUND
--------
11.1 Designation of Trustee. The Company, by appropriate
----------------------
resolution of its Board of Directors, shall name and designate a Trustee
and enter into a Trust Agreement with such Trustee. The Company shall have
the power, by appropriate resolution of its Board of Directors, to amend
the Trust Agreement, remove the Trustee, and designate a successor Trustee,
all as provided in the Trust Agreement. All of the assets of the Plan
shall be held in trust by the Trustee for use in accordance with this Plan
in providing for the benefits hereunder.
11.2 Exclusive Benefit. No part of the corpus or income of the
-----------------
Fund shall be used for or diverted to purposes other than for the exclusive
benefit of Participants and their beneficiaries, except as expressly
provided in this Plan and in the Trust Agreement.
11.3 No Interest in Fund. No person shall have any interest in,
-------------------
or right to, any part of the assets or income of the Fund, except to the
extent expressly provided in this Plan and in the Trust Agreement.
11.4 Trustee. The Trustee shall be a fiduciary with respect to
-------
management and control of Plan assets and shall have exclusive and sole
responsibility for the custody and investment thereof in accordance with
the Trust Agreement.
11.5 Expenses. Unless otherwise paid by the Company,
--------
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<PAGE>
the expenses of establishing and administering the Plan and Trust,
including any Fund asset charges and reimbursement for the reasonable
expenses incurred by the Trustee and the Committee members, shall be paid
from the Fund.
-73-
<PAGE>
ARTICLE XII
-----------
INVESTMENT BY THE TRUSTEE
-------------------------
12.1 General. The Trustee shall invest all contributions paid
-------
to it and the income thereon in the Investment Media that each Participant
may select in accordance with Section 12.2; provided, however, that
Employer Contributions and Supplemental Employer Contributions made in
Common Stock and allocated to a Participant's Account shall be credited to
the Common Stock Fund on behalf of such Participant. Investments in the
Common Stock Fund made by the Trustee at the direction of a Participant
shall be made at a price equal to the market value of the stock on the date
of purchase.
12.2 Investment Media.
----------------
(a) Thirty (30) days, or such other period as set by the
Committee, prior to the Activity Date as of which a Participant shall
commence to make Basic Contributions, he shall select one or more of the
Investment Media in which (except for Employer Contributions and
Supplemental Employer Contributions made in Common Stock and amounts
credited to his PAYSOP Account) his contributions thereto shall be
invested, and what percentage thereof, in increments of 1%, shall be
invested in each Investment Media. A Participant may amend his investment
selections for contributions in increments of 1% or transfer funds between
Investment Media in increments of 1% or in dollar amounts, subject to
reasonable administrative limits as may be
-74-
<PAGE>
established by the Committee, effective as of any prospective
Activity Date, via toll free telephone communication with the Trustee and
without obtaining prior confirmation or authorization from the Committee as
to the investment funds in which subsequent contributions and current
Account balances, in whole or in part, are to be invested; provided,
however, that any portion of a Participant's Employer Contribution and
Employer Valuation Accounts invested in the Common Stock Fund may not be
transferred to another Investment Medium prior to the Participant's
attainment of age fifty-five (55), or such other age as is established by
the Committee.
(b) Each Participant shall be solely responsible for the
investment direction he gives under the Plan. Neither the Company or its
officials, nor the Committee, the Trustee, or any other fiduciary of the
Plan will have any responsibility or liability for any losses which may
result from a Participant's investment directions. The Plan is intended to
be a plan described in Section 404(c) of ERISA and Title 29 of the Code of
-------
Federal Regulations Section 2550.404c-1, as in effect on January 1, 1994.
-------------------
12.3 Commingled Investment Media. The amounts contributed by
---------------------------
all Participants to each Investment Medium shall be commingled for
investment purposes.
12.4 Trustee May Hold and Distribute Cash. The Trustee may hold
------------------------------------
assets of the Fund and make distributions therefrom in the form of cash
without liability for interest, if
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<PAGE>
for administrative purposes it becomes necessary or practical to do so.
-76-
<PAGE>
ARTICLE XIII
------------
AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
13.1 Amendment. The Company reserves the right at any time, and
---------
from time to time, by or pursuant to resolution of the Board of Directors,
to alter, amend, and modify, in whole or in part, the provisions of the
Plan and the Trust Agreement; provided, however, that it shall be
impossible, except as provided in Section 5.4, for any part of the corpus
or income of the Fund, at any time, to be used for, or diverted to,
purposes other than the exclusive benefit of the Participants or their
beneficiaries. Any amendment made pursuant to this Section 13.1 shall be
binding upon each Employer, unless otherwise indicated. In addition, the
Committee may adopt such amendments to the Plan as it shall deem necessary
or appropriate to maintain compliance with current law or regulation, to
correct errors or omissions in the Plan document or to facilitate the
administration of the Plan. Any amendment adopted by the Committee shall
not increase the liability of the Company or materially affect the benefits
of any Participant hereunder. The Committee shall report at least annually
to the Board of Directors of the Company all amendments
adopted by the Committee during the Plan Year.
13.2 Termination. The Plan and the Trust Agreement forming part
-----------
of the Plan may be terminated or partially terminated or contributions
completely discontinued by or pursuant to resolution of the Board of
Directors (or with respect
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to any Employer, by the board of directors of that Employer with the
approval of the Company) at any time. In the event of a termination,
partial termination, or a complete discontinuance of contributions or in
the event an Employer is dissolved, liquidated or adjudicated a bankrupt,
the interest of the affected Participants of such Employer, their estates
and beneficiaries shall be non-forfeitable and shall be fully vested, and
distributions shall be made to them in cash or property or in any
combination of cash or property. When all assets shall have been paid out
by the Trustees, the Fund shall cease.
13.3 Merger. The Plan shall not be merged or consolidated with,
------
nor shall its assets be transferred to, any other plan unless each
Participant would (assuming the Plan then terminated) receive a benefit
after such merger, consolidation or transfer which is of value equal to or
greater than the benefit he would have received from the value of his
Accounts if the Plan had been terminated on the day before such merger,
consolidation or transfer.
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<PAGE>
ARTICLE XIV
-----------
GENERAL PROVISIONS
------------------
14.1 No Employment Rights. Neither the action of the Company in
--------------------
establishing the Plan, nor the action of any Employer in joining the Plan,
nor any provisions of the Plan, nor any action taken by the Committee shall
be construed as giving to any employee of an Employer the right to be
retained in its employ, or any right to payment except to the extent of the
benefits provided in the Plan to be paid from the Fund.
14.2 Source of Payments. All payments payable under the Plan
------------------
shall be paid or provided for solely from the Fund, and the Employers
assume no liability or responsibility therefor.
14.3 Governing Law. All questions pertaining to the validity,
-------------
construction and operation of the Plan shall be determined in accordance
with the laws of the Commonwealth of Pennsylvania except to the extent
superseded by ERISA.
14.4 Spendthrift Clause.
------------------
(a) No benefit payable at any time under this Plan and no
interest or expectancy herein shall be anticipated, assigned, or alienated
by any Participant or beneficiary, or subject to attachment, garnishment,
levy, execution, or other legal or equitable process, except for (1) an
amount necessary to satisfy a Federal tax levy made pursuant to Section
6331 of the Code and (2) any benefit payable pursuant to a domestic
relations order which is determined to be a Qualified Domestic Relations
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Order.
(b) Any attempt to alienate or assign a benefit hereunder,
whether currently or hereafter payable, shall be void. No benefit shall in
any manner be liable for or subject to the debts or liability of any
Participant or beneficiary. If any Participant or beneficiary shall
attempt to, or shall, alienate or assign his benefit under the Plan or any
part thereof, or if by reason of his bankruptcy or other event happening at
any time such benefit would devolve upon anyone else or would not be
enjoyed by him, then the Committee may terminate payment of such benefit
and hold or apply it for the benefit of the Participant or beneficiary.
14.5 Incapacity. If the Committee deems any Participant who is
----------
entitled to receive payments hereunder incapable of receiving or disbursing
the same by reason of age, illness, infirmity, or incapacity of any kind,
the Committee may direct the Trustee to apply such payment directly for the
comfort, support and maintenance of such Participant or to pay the same to
any responsible person caring for the Participant as determined by the
Committee to be qualified to receive and disburse such payments for the
Participant's benefit, and the receipt of such person shall be a complete
acquittance for the payment of the benefit. Payments pursuant to this
Section shall be a complete discharge to the extent thereof of any and all
liability of the Employers, the Committee, the Trustee and the Fund.
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14.6 Notices. Each Participant, Spouse, beneficiary and
-------
Alternate Payee shall be responsible for furnishing the Committee with the
current and proper address for the mailing of notices, reports and benefit
payments. Any notice required or permitted to be given shall be deemed
given if directed to the person to whom addressed at such address and
mailed by regular United States mail, first-class and prepaid. If any check
mailed to such address is returned as undeliverable to the addressee,
mailing of checks will be suspended until the Participant, Spouse,
beneficiary or Alternate Payee furnishes the proper address. This provision
shall not be construed as requiring the mailing of any notice or
notification if the regulations issued under ERISA deem sufficient notice
to be given by the posting of notice in appropriate places, or by any other
publication device.
14.7 Lost Payees. A benefit shall be deemed forfeited, and used
-----------
to reduce future Matching Contributions made pursuant to Section 5.1 by the
Employer that last employed the Participant, if the Committee is unable to
locate a Participant, a Spouse, a beneficiary or an Alternate Payee to whom
payment is due; provided, however, that such benefit shall be reinstated if
a claim is made by the party to whom it is properly payable.
14.8 Gender and Number. Except where otherwise clearly
-----------------
indicated by context, the masculine shall include the feminine, the
singular shall include the plural, and vice-versa.
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<PAGE>
ARTICLE XV
----------
SPECIAL PROVISIONS FOR TOP-HEAVY PLANS
--------------------------------------
15.1 General Rule. Notwithstanding any provision in the Plan to
------------
the contrary, for any Plan Year in which the Plan is determined to be a
Top-Heavy Plan, the provisions of this Article XV shall become effective.
15.2 Determination of Top-Heavy Status. The Plan shall be
---------------------------------
considered a Top-Heavy Plan for the Plan Year, if, as of the last day of
the first Plan Year and thereafter, as of the last day of the preceding
Plan Year (the "Determination Date"):
(a) the value of the sum of all Accounts of Participants who are
Key Employees (as defined below) exceeds 60% of the sum of all Accounts of
all Participants, or
(b) the Plan is part of an Aggregation Group and such Aggregation
Group is determined to be a Top-Heavy Group (as defined in Section
416(g)(2)(B) of the Code).
In determining the above Top-Heavy ratio, the Account balances of
an Employee (a) who is a Non-Key Employee (defined for purposes of this
Article as an Employee who is not a Key Employee) but who was a Key
Employee in any prior Plan Year, or (b) who has not performed services for
the Employer maintaining the Plan at any time during the five-year period
ending on the applicable Determination Date are disregarded.
A Key Employee is defined as any Employee, former Employee or the
beneficiary of such Employee who, at any time
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during a Plan Year or the immediately preceding four (4) Plan Years is: (a)
an officer of the Employer having annual 415 Compensation greater than 50%
of the amount in effect under Section 415(b)(1)(A) of the Code for any Plan
Year; (b) one of the ten (10) Employees who own the largest interests in
the Employer; (c) a 5% owner of the Employer; or (d) a 1% owner of the
Company having annual 415 Compensation from the Company of more than
$150,000.
For purposes of this Section, Aggregation Group means (a) each
plan of the Company or an Affiliated Company in which a Key Employee
participates, including any terminated or frozen plans which are maintained
within the five year period ending on the applicable Determination Date,
and (b) each other plan of the Company or an Affiliated Company which
enables such plan to meet the requirements of Sections 401(a)(4) or 410 of
the Code. The foregoing notwithstanding, the Company may treat any plan
maintained by the Company or an Affiliated Company not required to be
included in the Aggregation Group as being part of such group if such group
would continue to meet the requirements of Sections 401(a)(4) and 410 of
the Code with such plan being taken into account.
15.3 Minimum Contributions. For any Plan year in which the Plan
---------------------
is determined to be a Top-Heavy Plan pursuant to Section 15.2, the Employer
Contributions for such Plan Year for each Participant who is a Non-Key
Employee shall not be less than the lesser of:
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(a) 3% of the Participant's 415 Compensation for such Plan Year,
or
(b) the percentage at which Employer Contributions, Basic and
Supplemental Contributions are made or are required to be made under the
Plan for the Plan Year for the Key Employee for whom such percentage is the
highest. Notwithstanding the foregoing, if a Participant is also
participating in another defined contribution plan maintained by the
Company, the minimum contribution hereunder may be reduced in accordance
with regulations issued under Section 416(f) of the Code. If a Participant
is also participating in a defined benefit plan maintained by the Company,
"5%" shall be substituted for "3%" in paragraph (a) of this Section.
The Employer Contributions referred to above shall be provided to
each Non-Key Employee who is a Participant and who has not separated from
service at the end of the Plan Year, regardless of such Employee's number
of Hours of Service, Compensation, or whether such Employee had made any
contribution to the Plan.
15.4 Adjustments to Maximum Limits on Benefits and
---------------------------------------------
Contributions. For any Plan Year in which the Plan is determined to be a
Top-Heavy Plan pursuant to Section 15.2, paragraphs (a)(1) and (b)(1) of
Section 6.10 shall be read by substituting the number "1.00" for the number
"1.25", wherever it appears. Notwithstanding the foregoing, no adjustment
shall be made to Section 6.10 if the following requirements are met:
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(a) Section 15.3 shall be applied by substituting "4%" for "3%";
and the annual accrued benefit derived from employer contributions under
the defined benefit plan for each Participant who is a Non-Key Employee
shall not be less than the product of:
(1) 3% of such Participant's average annual 415 Compensation
during the period of consecutive years (not exceeding five) which yields
the highest average; and
(2) the Participant's Years of Service (not exceeding 10)
during which the Plan is a Top-Heavy Plan; and
(b) the aggregate of the Accounts of Participants who are Key
Employees under the Plan does not exceed 90% of the aggregate of the
Accounts of all Participants; and
(c) the sum of (i) the present value of the cumulative accrued
benefits for Key Employees under all defined benefit plans in the
Aggregation Group, and (ii) the aggregate of the accounts of Key Employees
under all defined contributions plans in the Aggregation Group does not
exceed 90% of such sum determined for all employees; and
(d) in the case of a Participant also participating in a defined
benefit plan maintained by the Company, all of the requirements of
paragraph (a) shall be met by substituting "7-1/2%" for "3%" in Section
15.3.
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<PAGE>
Supplement A
------------
Special Rules for Puerto Rico Participants
------------------------------------------
A-1 Purpose and Effect - The purposes of this Supplement A is to comply with
------------------
the requirements of Section 165 of The Puerto Rico Income Tax Act of 1954
(the "ITA"). The provisions of this Supplement A shall be effective as of
April 1, 1988, and shall apply to those employees of Rhone-Poulenc Rorer
Inc. (the "Company"), and any of its subsidiaries as may be designated by
the Board of Directors of the Company as an "Employer" under the Plan, who
are residents of the Commonwealth of Puerto Rico ("Supplement A
Participants).
A-2 Compensation - For purposes of Paragraph A-7 below, "compensation" shall
------------
mean all remuneration which is required to be reported as wages by the
Employer to the Puerto Rico Treasury Department on Form 499 R-2/W-2 PR,
and, unless the Company elects otherwise, any Supplement A Participant's
Basic or Supplemental Contributions to the Plan.
A-3 Maximum Basic and Supplemental Contributions - The sum of a Supplement A
--------------------------------------------
Participant's Basic and Supplemental Contributions under Sections 4.1 and
4.2 of the Plan may not exceed in any event the lesser of 10% of the
Supplement A Participants Compensation or $7,000.
A-4 Return of Supplement A Participants Basic and Supplemental Contributions
------------------------------------------------------------------------
- If the Supplement A Participant's Basic and Supplemental Contributions
made under this Plan and his elective deferrals made under any other
qualified cash or deferred arrangement maintained pursuant to Section
165(e) of the ITA for a taxable year exceed the maximum Basic and
Supplemental Contributions limitation described in Paragraph A-3 above, the
Supplement A Participant shall allocate to the Plan or to such other
qualified cash or deferred arrangement the excess deferrals. The Supplement
A Participant shall notify the Committee of such allocation in writing no
later than the March 1 following the Supplement A Participant's taxable
year in which the excess deferrals were made. Notwithstanding any other
provisions of the Plan, not later than the April 15 following the close of
the Supplement A Participant's taxable year, the Committee may cause the
Trustee to distribute to the Supplement A Participant the excess deferrals
(adjusted for any
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income or loss attributable thereto and subject, however, to the
withholding of taxes and other amounts as though such amounts were current
remuneration) allocated to the Plan by the Supplement A Participant
pursuant to Article IV of the Plan.
A-5 Rollover Contributions - Supplement A Employees may make Rollover
----------------------
Contributions to the Plan under Section 4.10 of the Plan except that the
Plan from which the Supplement A Employee received the distribution must be
a Plan that qualifies under Section 401(a) of the Internal Revenue Code of
1986 and Section 165(a) of the ITA.
---
A-6 Puerto Rico Limitation on Contributions - For any Plan Year, (a)
---------------------------------------
contributions under the Plan shall not exceed the limitations on deductions
imposed under section 23(p)(1)(C) and 23(p)(1)(F) of the ITA, (b) the Plan
shall satisfy the coverage requirements of Section 165(a)(3) of the ITA,
and (c) the Plan shall satisfy the Puerto Rico Actual Deferral Percentage
Test set forth in Paragraph A-7 below.
A-7 Puerto Rico Actual Deferral Percentage Test - In no event shall the
-------------------------------------------
actual deferral percentage (as defined below) of the Highly compensated
Supplement A Participants (as defined in paragraph A-8) for any calendar
year exceed the greater of:
(a) the actual deferral percentage of all other Supplement A Participants
for such calendar year multiplied by 1.5; or
(b) the actual deferral percentage of all other Supplement A
Participants for such calendar year multiplied by 2.0; provided that the
actual deferral percentage of the Highly Compensated Supplement A
Participants does not exceed that of all other Supplement A Participants by
more than two percentage points.
The "actual deferral percentage" of a group of Supplement A Participants
for a calendar year means the average of the ratios (determined separately
for each Supplement A Participant in such group) of: (i) the sum of the
Basic Contributions and Supplemental Contributions allocated to each
Supplement A Participant for such calendar year; to (ii) the Supplement A
Participant's compensation for such calendar year.
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For purposes of this Paragraph, the deferral percentage of a Highly
Compensated Supplement A Participant who has made elective deferrals under
any other qualified cash or deferred arrangement maintained by the Company
or an Affiliated Company pursuant to Section 165(e) of the ITA shall be the
sum of his deferral percentages under all such plans.
A-8 Highly Compensated Supplement A Participant - The term "Highly
-------------------------------------------
Compensated Supplement A Participant" means any Supplement A Employee who
is eligible to participate in the Plan and is more highly compensated than
two-thirds of all other Supplement A Employees eligible to participate in
the Plan.
The Puerto Rico Actual Deferral Percentage Test of Paragraph A-7 and the
determination of who is a Highly Compensated Supplement A Participant shall
be done separately for each Employer.
A-9 Supplemental Section 165(e) Employer Contributions - As soon as possible
--------------------------------------------------
after the end of the Plan Year, the Company, in its discretion, may
determine to make a Supplemental Section 165(e) Employer contribution,
subject to the limitations set forth in Paragraph A-3. The Supplemental
Section 165(e) Employer Contribution for any Plan Year under this paragraph
will be made no later than the expiration of the period within which such
contribution may be paid and deducted for the purpose of Puerto Rico income
taxes. Supplemental Section 165(e) Employer Contributions shall be
allocated to the Supplemental Employer Contribution Account of each
Supplement A Participant who qualifies for Employer Contributions under
Section 3.2 of the Plan and who either (i) is in the active employment of
an Employer or an Affiliated Company on the last day of the Plan Year for
which the Supplemental Section 165(e) Employer Contributions are made or
(ii) dies, suffers a Permanent and Total Disability, or has a Retirement
during the Plan Year; provided, however, that if this method of allocating
the Supplemental Section 165(e) Employer Contribution for a Plan Year (A)
would not serve to prevent the Plan from failing to satisfy the
requirements set forth in Paragraph A-7 (such failure to be determined
without regard to the Supplemental Section 165(e) Employer Contribution)
and/or (B) would result in the Plan's failure to satisfy the requirements
set forth in Paragraph A-7, then, but only to the extent necessary to
satisfy the requirements set forth in Paragraph A-7 (as determined by the
Committee in its sole discretion), the allocation of the
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Supplemental Section 165(e) Employer Contribution for the Plan Year shall
be made only to those Supplement A Participants who otherwise satisfy the
requirements set forth in (i) and (ii) above and who are not Highly
Compensated Supplement A Employees. Supplemental Section 165(e) Employer
Contributions for all purposes under the Plan, except as otherwise provided
herein.
A-10 Return of Excess Contributions - If the average deferral percentage for
------------------------------
all Highly Compensated Supplement A Participants exceeds the amount
specified in Paragraph A-7 for any Plan Year, the Basic and Supplemental
Contributions (and corresponding Employer Contributions) for the Highly
Compensated Supplement A Participant(s) with the Highest deferral
percentage shall be reduced so that his applicable percentage is reduced to
the greater of (a) such percentage that enables the Plan to satisfy the
applicable percentage test, or (b) a percentage equal to the applicable
percentage of the Highly Compensated Supplement A Participant(s) with the
next highest percentage. This procedure shall be repeated until the Puerto
Rico Actual Deferral Test is satisfied. The amount so reduced, together
with the attributable earnings thereon, shall be deemed to have been
contributed to the Plan by mistake of fact, shall be refunded to the
Employer, and the portion attributable to Basic and Supplemental
Contributions shall thereafter be paid (subject, however, to the
withholding of taxes and other amounts as though such amounts were current
remuneration) by the Employer to the Supplement A Participants from whose
Compensation such amount was obtained.
A-11 Use of Terms - All terms and provisions of the Plan shall apply to this
------------
Supplement A, except that where the terms and provisions of the Plan and
this Supplement A conflict, the terms and provisions of this Supplement A
shall govern.
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Supplement B
------------
Special Matching Contributions for
Puerto Rico Participants who are
Members of the United Auto Workers' Union
-----------------------------------------
The Basic Contributions for Puerto Rico Participants who are Members of the
United Auto Workers' Union shall be matched by Employer Contributions in
accordance with the following schedule:
Basic Contribution Employer Contribution
(as a % of Compensation) (as a % of Basic Contribution)
------------------------ ------------------------------
1st 1% 100%
2nd 1% 75%
3rd 1% 50%
4th-6th 1% 25%
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Supplement C
------------
Special Matching Contributions for Participants
who are Members of Warehouse Employees' Local 169
-------------------------------------------------
Effective January 1, 1993, the Basic Contributions for Participants who are
Members of Warehouse Employees' Local 169 shall be matched by Employer
Contributions in accordance with the following schedule:
Basic Contribution Employer Contribution
(as a % of Compensation) (as a % of Basic Contribution)
------------------------ ------------------------------
1st 1% 100%
2nd 1% 90%
3rd 1% 80%
4th-6th 1% 50%
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Supplement D
------------
Special Matching Contributions for
Participants who are Members of
International Chemical Workers' Union, Local 498
------------------------------------------------
Effective January 1, 1994, the Basic Contributions for Participants who are
Members of International Chemical Workers' Union, Local 498 shall be
matched by Employer Contributions in accordance with the following
schedule:
Basic Contribution Employer Contribution
(as a % of Compensation) (as a % of Basic Contribution)
------------------------ ------------------------------
1st 1% 100%
2nd 1% 90%
3rd 1% 80%
4th-6th 1% 50%
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